- 2015 starts with house prices up almost £5,000
- But prices dip in final three months of 2014
- Flats see greatest gains
- Flurry of activity expected in advance of tax changes in April
House prices in Glasgow and the west of Scotland rose by almost £5,000 (4.5%) in 2014 despite a seasonal dip in the last three months of the year. Nevertheless, the average price of a home in and around the city fluctuated around the £126,000 mark for most of 2014 (see table and graph) and there is little sign that prices will climb sharply in 2015.
While average prices across the board rose by 4.5%, some property types did better than others. Flats saw an increase of 11.7% and the average price of a detached house rose by 8.6%. In contrast, the average price of both a semi-detached and a terraced house fell by 1% and 5.6% respectively. Overall, average prices have recovered strongly from the £112,400 low recorded in early 2013, but are still 13.3% below the peak of £143,400 in mid-2007.
Selling times steadied at just over 90 days, reflecting continued strong demand and a shortage of properties coming on to the market. But there were marked local differences with closing dates and shorter selling times in the most popular areas, notably the west end of Glasgow and some of the suburbs in East Renfrewshire and East Dunbartonshire.
According to Professor Gwilym Pryce, Director of the Sheffield Methods Institute at Sheffield University, who analysed GSPC’s sales data: “2014 was something of a milestone in the rather shaky housing market recovery of the West of Scotland. It is the first year since 2007 where we have seen positive annual house price growth in every quarter, in stark contrast to 2013 when we saw negative annual house price growth in every quarter.
For those looking for evidence of consistent housing asset appreciation, this has been the best year for some time. Overall, however, prices remain well below their peak before the financial crash. Controlling for the mix of dwellings coming onto the market, average prices in the West of Scotland are currently 13% lower than they were in quarter 3 of 2007.”
From my point of view, the analysis suggests that prices are broadly stable and, without a substantial increase in mortgage lending, it seem they are likely to remain that way for some time. Nevertheless, demand remains strong and properties are generally selling well provided that the asking prices is no over-ambitious.
Perhaps the most significant feature of the market over the last few years, however, has been the relatively low volume of new instructions. The switch from the current Stamp Duty regime to the new Land & Buildings Transactions Tax (LBTT) in April (see my earlier post on this here) may prompt a flurry of activity in the early months of 2015, but wider interest in moving up the property ladder will require greater confidence that real incomes are set to rise for some time.