● Summer bounce as prices rise £4,000
● Average selling prices 2.4 per cent lower than a year ago
● Selling times fall by 30%
House prices in Glasgow and west central Scotland are higher now than they were at the start of the year, but remain 2.4 per cent lower than they were at this point last year. Average selling times – a key indicator of market conditions – have fallen sharply, down from 151 days a year ago to 105 days by the end of June.
Selling prices in Strathclyde in the second quarter of the year rose by almost £4,000 to reach £135,000 after a poor start to the year. Nevertheless, the average property value remained just over £3,000 or 2.4 per cent below the level seen at this time last year. Prices are now 10 per cent below their peak in 2007.
The analysis of GSPC’s sales data is carried out independently by Professor Gwilym Pryce of Glasgow University who points out that, although prices appear volatile on a quarter by quarter basis, actual change over the longer term has been relatively modest: “Looking at price trajectories over a slightly longer period—since 2010, say—we can see that prices have not really changed very much. There have been variations from quarter to quarter, but these have been fluctuations around a fairly static trend”. Price fluctuations should moderate as the market stabilises at a new level.
The biggest change in the last three months has been the fall in selling times. The average selling time is now 30 per cent lower than it was at this time last year and almost 45 per cent lower than it was at the start of 2012. In the recent past, selling times have fallen in line with price falls as homeowners accept lower offers to conclude a sale. In this case, however, both selling times and prices rose together, as a shortage of homes for sale prompted buyers too act more decisively.
Commenting on the results, Professor Gwilym Pryce said: “Taken together, these figures suggest little overall change in property values. Temporary fluctuations continue but we are unlikely to see any real growth until the wider economy shows clear and persistent signs of recovery”.
From my point of view, I think the improvement in selling times and prices in tandem is the most significant finding. It is almost certainly driven by a shortage of homes coming on to the market, offering less choice to buyers than they might once have had and prompting some to take the initiative sooner and more decisively than in the recent past.
Nevertheless, it is unlikely to signal a wider recovery in the market. Mortgage lending remains constrained, exacerbated by fears of a Euro collapse and the losses UK banks might make if that happened. Moreover, there is little sign of a rise in real incomes that would make property more affordable and give buyers the confidence required to make a long term commitment. It is little wonder that transactions are at very low levels.
Overall, we expect no great shift in prices one way or another in the second half of the year or a significant increase in the number of transactions. Nevertheless, greater price stability and shorter selling times should make moving home quicker and less stressful than it has been for some time.