The property market in Glasgow and the west of Scotland lost momentum over the summer as house price growth and selling times stalled. But much of the apparent ‘pause’ in the market could be attributed to one-off events such as the Commonwealth Games and the referendum on independence.
House prices in Glasgow and the west of Scotland are now 8.6% (£10,000) higher than they were at this time last year (see graph).
But house price growth has slowed with little change in prices over the last three months (see table below) and average prices remain 11% below their previous peak in 2007. The headline rate of house price inflation was driven not by recent changes in price, but by a particularly weak quarter this time last year. The negative annual house price inflation recorded then was not repeated this time, pushing annual house price inflation to its highest level since the end of 2007.
Average time on the market remained virtually unchanged on the same time last year and rose by 20 days compared to the previous quarter (see graph).
The marked rise in the number of new properties coming on to the market experienced in the spring this year also faltered in the third quarter, although a recent recovery in Home Report instructions suggests that that was a temporary ‘blip’.
According to Professor Gwilym Pryce, Director of the Sheffield Methods Institute at Sheffield University, who analysed GSPC’s sales data: “Looking at the year as a whole, we have seen tangible signs of a housing market recovery, particularly in Glasgow, but the latest results from GSPC house price data largely reflects the strong growth in quarter 2 rather than a summer boom. House price changes from quarter to quarter can fluctuate considerably in any event, so the results for last quarter are not necessarily the start of a trend. But if the summer dip in some areas was due to referendum uncertainty, we should see those markets rally in the fourth quarter”.
From my point of view, the traditional summer slowdown was reinforced and extended this year by two key factors; a fabulous Commonwealth Games which caught the imagination of the entire city; and the increasingly tense build-up to the referendum on independence which triggered widespread engagement regardless of location or occupation. In both cases, the prospect of moving home ceased to be the highest priority for many, leading to a slowdown in both new instructions and sales.
There are some early indicators, however, that activity levels are now recovering and the prospect that many would-be movers who put their move on hold will now look to make up for lost time.