The latest House Price Monitor from Lloyds TSB Scotland shows that the housing market remains “muted”. The quarterly index of average house prices fell from 290 to 287 between November 2012 and January this year. And looking at the past twelve months, the results show that there has only been a slight rise in prices with the average price of a property up by just 0.2% to £151,320.
The TSB’s Chief Economist, Professor Donald MacRae, said that the Scottish housing market had “adjusted to the recession with a halving of sales and a period of price volatility. There is evidence of a muted pick-up in the number of houses bought and sold in the last quarter of 2012, with average prices now at 89% of their pre-recession peak.”
The report is drawn from business done by the the bank itself and suggested that buyers’ confidence had fallen as people watch house price inflation rise above their earnings. It prompted Professor MacRae to conclude that consumer confidence had “turned negative at the beginning of 2011 and remained negative for 21 of the 24 months to the end of 2012. The latest figure for quarter four 2012 shows a return to negative territory. Consumer confidence remains low, with the level of retail price inflation exceeding the average increase in earnings squeezing disposable income. The rate of increase in consumer spending remains modest.”
He believes there could be a “modest pick-up” in the market if mortgages become made more available and prices remain at their current levels.