LEADING Ayrshire estate agents Donald Ross have reacted quickly to calm fears that we might be facing a crash in house prices in the UK.
Last week the International Monetary Fund reported that the property boom of the past ten years has left the British housing market in danger of following the slump in American house prices.
In a bleak warning, the IMF found that homes in Britain were overpriced by up to 40 per cent — far more than the overpricing in the US before the current property slump began there. The finding might fuel fears over housing market prospects after growing evidence recently that prices have already begun to fall in some parts of Britain.
However, Donald Ross Estate Agents managing director Steven Miller (pictured above with his wife and fellow director Jacqueline at their offices in Ayr) denied that a house price crash was likely to happen here in the UK.
Moreover he said: “It is our view that the Ayrshire housing market in particular is extremely robust; therefore we do not expect the talk of a price crash to greatly effect the local market.
“However the longer term picture may differ from previous years, in that there could well be lower house price inflation in the coming months and years.”
The annual rate of house price inflation in Scotland is now 14.2%, above the UK average of 10.7%, according to the latest Quarterly Scottish House Price Index from Bank of Scotland. Prices in Scotland rose by 0.7% in the third quarter of 2007.
The average price of a house in Scotland is currently £141,158. This is 29% less than the UK average of £198,898.
Greater London prices are now just 2.3 times higher than those in Scotland, compared with 3.0 times five years ago.
The average house price in South Ayrshire is now £170,668 compared to £159,147 a year ago, an increase of 7%. In North Ayrshire the average price is now £139,772 compared to £119,860 in 2006, an increase of 17%. And in East Ayrshire the average house has risen 11% from £123,709 last year to £136,723 now.
Bank of Scotland chief group economist Martin Ellis commented: “House prices in Scotland are still the most affordable in the UK, despite an annual rise of 14.2%. This increase is well above the UK average of 10.7%. The average price of a house in Scotland is currently £141,158 - which is 29% less than the UK average of £198,898.
Because of this large increase in prices over the past year, the gap between prices in Scotland and London has narrowed to 2.3 times, down from 3 times in the third quarter of 2002.
www.donaldross.co.uk
