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September Scottish house prices defy expected seasonal drop

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  • 16/11/2011
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September Scottish house prices defy expected seasonal drop
Property prices in Scotland increased for the third consecutive month in September, up by 0.8% as the summer bounce fed through later than normal, according to LSL Property Services and Acadametrics.

Their figures reveal that a 1.3% drop in house prices is typically expected between August and September, but increasingly competitive mortgage rates and rising buy-to-let activity has sustained the market.

However, the researchers predicted that the final quarter will see minor monthly house price falls, leaving the housing market down on average 1.5% for the year compared to 2010.

This mirrors the annual house price change in September of -1.5%, which has slowed compared to the -1.9% recorded in August.

The monthly increase in September took the average house price in Scotland to £147,546.

However, the number of housing transactions declined in September, as the autumn dip set in, with sales running at just 44% of long-term levels.

Richard Sexton, director of e.surv chartered surveyors, said: “To a very significant extent, the market is still being propped up by wealthier buyers who are being able to take advantage of exceptionally low mortgage rates.

“Sadly for lower income buyers, lenders have very strict criteria attached to these mortgages which means they can’t hope to get approval for them.”

He said that the “gridlock” seen in the lower end of the housing market would filter up the property ladder, leaving house prices lower than 2010

Nevertheless, Sexton added: “The market is showing commendable resilience to the economic turmoil surrounding it.

“The desire to own a home still ingrained into the national psyche, but the lack of availability of mortgage finance is bottling up demand. If mortgages were more widely available, we would be seeing no shortage of buyers.”

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