Figures just released by the Highland Solicitors Property Centre (HSPC) show that average house prices in the Highlands were down marginally in 2012. The average house price for 2012 was £163,012 – 1.8% down on 2011.
However, the year ended on a high note with average prices in December rising significantly to £182,328. This was the highest monthly average since July 2008, up 15% on December 2011.
The HSPC figures also show that the Highland property market is continuing to perform above the Scottish average. At £168,259 the average Highland house price for the final quarter of 2012 was 9.7% ahead of the Registers for Scotland average house price for October (the most recent monthly figure available) of £153,370.
While prices in the Highlands continue to hold up reasonably well, sales continue to be constrained by the same factors that are affecting the market throughout the UK. Total sales for 2012 fell marginally, ending the year 1.6% down on the 2011 figure.
Interest in the Highland property market continues to run at a very high level. Visits to the HSPC website have exceeded 100,000 for most months during 2012 and enquiries continue to run at record levels.
This indicates strong pent-up demand. But, buyers struggle to raise the substantial deposits now required by most mortgage lenders, while other buyers lack confidence in their own financial prospects.
HSPC note there are signs of growing confidence – not least in the strong performance for December.
First time buyers are also finding it easier to obtain a mortgage. The Council for Mortgage Lenders report that 5,100 loans were advanced to first-time buyers in Scotland in the third quarter of 2012. That is the highest figure for almost three years and 9% up on the same period in 2011.
At the same time, however, there was a slight fall in the number of loans to home movers. The CML figures show that, at 7,400, the number of loans in Scotland was down 3% compared to 2011. This contrasts with a 12% increase in the same period for the whole of the UK.
“It is quite clear, from the high level of enquiries we receive every day at the HSPC Property Centre and through the website, that there is no shortage of potential buyers. There are also plenty of people who want to sell,” says Sarah Woodcock, Manager of HSPC.
“What is needed to get the market moving is to tackle the issue of mortgage supply and the substantial deposits that are now required.
“The Scottish Government has instigated the MI New Home Scheme, with the aim of making 95% mortgages available for new-build house sales, but this only addresses the issues in a relatively small proportion of the total housing market.”