Page last updated at 14:55 GMT, Tuesday, 6 January 2009

Scots housing market 'best in UK'

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The fall in property prices in Scotland has been less dramatic than in the UK as a whole, according to the latest figures.

The Nationwide Building Society reported that the UK's annual house values fell by 15.9% in 2008.

However, in Scotland prices went down by 8.1% over the year.

The Nationwide's chief economist, Fionnuala Earley, said: "Scotland remains the best performing part of the UK."

In its final quarter survey of 2008, the building society said that UK prices fell by 2.5% in December, taking the average cost of a house down to 153,048 - 29,000 less than a year ago.

The building society says that as prices have now fallen for 14 months in a row they are 18% lower than their peak in October 2007.

However, Scotland was the only region to see an increase during the fourth quarter, with prices rising by 0.1%.

The report said that Scotland was the most optimistic part of the UK with regard to expectations for future house price movements and had been so "consistently throughout 2008".

The report added: "While current, relatively positive expectations are not a guarantee that prices will follow the same path, they do signal a greater degree of confidence in the Scottish market than in other parts of the UK.

"To the extent that we know the importance of confidence in housing market performance, this bodes well for Scotland."

All sub-regions within the country have experienced annual house price falls and of the three main cities in Scotland, Aberdeen saw the largest annual fall at 11%, closely followed by Glasgow at 10%.

Edinburgh performed best with price falls of 6% in the year. The largest fall was experienced in Renfrewshire and Inverclyde, where prices fell by 15% over the last year.

The Nationwide's Ms Earley said: "Scotland has performed very, very steadily over the cycle and affordability has been much better than in other parts of the UK.

"I think we are still seeing Scotland bucking the trend in terms of the extent of changes in prices, but I don't think that Scotland in general is going to just continue to see those increases in prices we saw in the last quarter.

"It is going to be affected by the economy going into recession, the UK economy going into recession, and we will expect to see further falls in prices in Scotland."

She added that Scotland's public sector was a "relatively important" factor when it came to house prices.

Ms Earley explained: "If you've got more stable employment as a result of of a bigger public sector then that should underpin the housing market by making the ability of people to pay their loans and continuing to plan and move house more available to them."

'Increasingly difficult'

In addition, the latest market report from the Glasgow Solicitors Property Centre (GSPC) has concluded that the average price of a home in west central Scotland is now 134,000, a fall of 14,000 compared with a year earlier.

In Glasgow, the average price now stands at 146,000, a fall of just under 5,000 over the past 12 months.

The survey also found that average selling times had also lengthened - rising from 78 days at the start of October to 94 days. A year ago, average selling times were just 41 days.

GSPC chairman, Michael Samuel, said the market was being affected by, not so much price, but the fall in the number of transactions.

He added: "Homeowners who want to move are finding it increasingly difficult to do so, in large part due to the shortage of mortgage lending. We urgently need to see a recovery in mortgage lending, not to sustain prices but to maintain a level of activity that will allow people to move home".

Nationwide sub-region 2008 prices (Q4) % change over 10 years Annual change last quarter Annual change (Q4)
Aberdeen city 209,641 137 -7 -11
Aberdeen and Moray 154,988 136 -2 -7
Dunbartonshire and N Lanarkshire 138,849 102 -8 -12
Dundee and Angus 142,321 134 -6 -10
Edinburgh city 241,617 142 -3 -6
Fife 131,565 125 -5 -6
Glasgow city 159,508 130 -8 -10
Highlands and Islands 143,501 139 -5 -6
Lothian and Falkirk 148,449 114 -4 -9
Perthshrie and Stirling 152,683 117 -3 -6
Renfrewshire and Inverclyde 145,700 104 -10 -15
South Lanarkshire 138,026 117 -5 -7
Southern Scotland 134,305 135 -5 -6
Source: Nationwide house price index

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