Scottish house prices on the rise once more

AFTER pausing for breath in the previous quarter, Scottish house prices are once more on the rise, according to the latest Scottish House Price Monitor from Lloyds TSB Scotland.


[Pictured: Lloyds TSB Scotland chief
economist Professor Donald MacRae.]

In the three months to 30 April 2008, the quarterly price index for the average domestic property in Scotland rose by 2.3 per cent to give an average mix adjusted Scottish house price of £163,639. On an annual basis, Scottish house prices have risen by 11.6 per cent. The gain this quarter combined with the fall in the previous quarter gives an average price change over the last six months of +1 per cent.

The north of the country is leading the rise with Aberdeen reporting an annual increase of +19 per cent and the North excluding Aberdeen a very strong +26 per cent.

Though Dundee is the only area to report a fall this quarter at -5.2 per cent, the figure for the last twelve months demonstrates the underlying strength of the market at +18 per cent. With Central/Fife/Perth and Tayside reporting a robust annual rise of +13 per cent and Edinburgh +12 per cent, any slowdown in the Central Belt looks modest.

Only in Glasgow, the South West and South East are annual figures somewhat lower. However, with all three areas reporting rises in the quarter ranging from +1.4 to +9.4 per cent, the Scottish housing market is portraying a more positive picture than elsewhere in the UK. Prices are not falling, but the rate of rise is slowing.

The price movement across Scotland is composed of price changes in different property types. Flats are showing an increase of 4.1 per cent in the quarter, detached properties an increase of 3.2 per cent and semi-detached properties an increase of 1.0 per cent. Only terraced houses show a fall in the quarter of 2.4 per cent.

Lloyds TSB Scotland chief economist Professor Donald MacRae said: “Following last quarter’s pause for breath after seven years of house price increases, the average Scottish house price is again on the rise. However, the rate of increase has slowed substantially to a much more sustainable rate.

“The latest quarterly gain has more than compensated for the last quarterly fall, to give an average price change over the last six months of +1.0 per cent.”


Steven Miller and his wife Jacqueline (pictured above) are directors of leading Ayrshire estate agents Donald Ross. Steven commented: “In general the Ayrshire market has had a good start to 2008, however the market has slowed somewhat as buyers and sellers wait to see the outcome of the recent publicity.

“The local market is much more buoyant than the press is reporting nationwide. South Ayrshire is a very robust market and still continues to offer buyers excellent value for money coupled with some of Scotland’s finest amenities, including championship golf courses, sailing, fishing and an excellent selection of award winning restaurants and hotels.

“Contrary to some predictions of a fall in prices, we would expect house price inflation to slow to between 2-5% per annum, outlining South Ayrshire’s highly desirable residential benefits.”


Bob Cherry (pictured above) is a partner in property consultants CKD Galbraith, based in their Ayr Office. Looking at the latest figures from an Ayrshire perspective, Bob commented: "The market in Ayrshire has been quieter and slower in the first part of 2008, although we are seeing a pick-up in sales this month with the better weather.

"Our experience is that properties of quality and individuality continue to sell well, provided they are marketed at a realistic guide price.

"Viewers are plentiful - but more cautious,selective and discerning as prospective buyers than in previous years.

"There is life in the market yet - professional marketing and sensible pricing is the key."

www.ckdgalbraith.co.uk

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Consistency pays off in Ayrshire’s property market


By: Graeme Stewart (pictured above)

THERE are several reasons why Ayrshire’s housing market has not witnessed the kind of slump seen elsewhere in the UK, but the influence our Irish neighbours have on the level of demand for houses in Ayrshire should not pass without comment.

Whether or not that influence can be attributed largely to the fact that Ayrshire tends to be their introduction to Scotland, both Ayrshire’s commercial and residential property markets have benefited greatly over recent years from a buoyant level of demand from Irish investors.

Particularly noticeable throughout the course of last year was the number of Irish investors buying up residential properties throughout Ayrshire for buy-to-let purposes, partly because that market had become saturated in their own backyard. And despite some evidence of an over-supply for certain types of buy-to-let property within some pockets of Ayrshire, in general the housing market remains buoyant.

Arguably the chief reason why Ayrshire’s housing market has managed to escape any discernible downturn can be explained by the fact that, traditionally, Ayrshire is a more consistent marketplace than either Glasgow and Edinburgh.

The obvious benefit of Ayrshire’s consistency is that whilst its housing market rarely if ever heats up to the point where we see the emergence of such dramatic rises in prices as seen in certain parts of Glasgow and Edinburgh, house prices in Ayr are generally well insulated against the effects of any slump in the overall market.

Of course, Ayrshire is not without a few ‘hotspots’ of its own. The bulk of properties at the very top end of the market tend to be located in and around the South Ayrshire towns of Troon, Prestwick and Ayr, where a few £1million house sales have been seen over recent years. And properties with a sea view tend to sell at a premium. Indeed, the difference in value between a property with an uninterrupted view across the sea to Arran and a similar property situated one street back can exceed 20 per cent.

Aside from coastal properties, demand is also high in Ayrshire for rural properties, particularly with some land attached. That demand has been driven largely by the equestrian market, which developers have responded to with the introduction of various steading conversions to the marketplace over recent years.

Meanwhile, another significant distinctive feature of Ayrshire’s housing market that helps insulate it against the cooling effects of a broader market is the buoyant level of demand for second homes within Ayrshire, particularly from keen golfers and sailors, whether from Ireland, Glasgow, elsewhere in Scotland or south of the border.

Recent years have seen a developing popularity of Ayrshire as an ideal location for a second home – and given its splendid beaches, championship golf courses, harbours, marinas and numerous hospitality, cultural and heritage offerings – as Burns country Ayrshire is home to a major international tourism magnet – it’s not too difficult to understand why.

Of course, as well as a growing number of second homes within Ayrshire’s mainland, much of Arran’s and Millport’s housing markets are essentially driven by the perennially buoyant holiday home market.

Meanwhile, although South Ayrshire is undoubtedly the most affluent housing market of the districts three areas, both North Ayrshire and East Ayrshire have seen huge rises in house prices over recent years, partly because there is a much greater volume of affordable housing within both of these areas than in South Ayrshire. And whilst during the winter months the housing market in North Ayrshire was the most buoyant of the three, prices are being maintained across the board throughout Ayrshire.

That means that, in North and East Ayrshire, one bedroom starter flats currently fall within the £50,000-£70,000 price bracket whilst, in South Ayrshire, the asking price for a one bedroom property would typically be around £10,000-£15,000 more than that. Similarly, whilst a two bedroom modern house in North and East Ayrshire would currently expect to sell for around £100,000-£110,000, a comparable property in South Ayrshire could achieve around £120,000-£130,000.

And whilst a family-sized bungalow in North and East Ayrshire would currently be valued at around £200,000, in South Ayrshire that could be £230,000-£250,000.

Meanwhile, because East Ayrshire Council is the most proactive of the three in terms of releasing land, the bulk of new build activity within Ayrshire has tended to reside in East Ayrshire over recent years. There has been a considerable amount of new build developments in Kilmarnock of late, precipitated partly by the upgrading of the M77, the anticipation of which resulted in real house price rises in such areas as Stewarton and Fenwick.

Significantly improved transportation links, including the rejuvenated Prestwick Airport mean that Ayrshire’s homeowners can look forward to spring with genuine grounds for optimism as the temporary dip in the housing market at the tail end of last year recedes into distant memory.

[Graeme Stewart is a managing partner at J&E Shepherd, Chartered Surveyors.]

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