ESPC House Price Report - December 2012
- The total number of homes sold across East Central Scotland during the fourth quarter of 2012 was at its highest level for five years.
- In the three months to December the average house price in Edinburgh fell by 8.5% annually to £202,266.
- In East Lothian and Midlothian house prices were also below 2011 levels.
- In West Lothian the average house price rose by 9.3% annually but this followed a decline of 11.1% the previous year meaning that the average price in the area has simply returned to 2010 levels.
- 20.3% of homes sold during the last three months of 2012 achieved their Home Report valuation, up slightly from 18.4% a year ago.
- Just 1.1% of sellers bringing their home to the market between October and December set their asking price above the Home Report valuation.
In the face of a decrease in average house prices, East Central Scotland saw a substantial rise in the number of house sales. The total number of homes sold across Edinburgh, the Lothians and Fife during the last three months rose by 11.3% annually and to the highest level recorded during the fourth quarter since 2007.
At the same time, prices declined in most areas. The average house price in Edinburgh during the fourth quarter of 2012 stood at £202,266 following a year-on-year decline of 8.5% according to latest figures from ESPC. This marked the fifth consecutive month during which the average house price in the Capital had fallen on annual basis.
In East Lothian and Midlothian house prices were also below 2011 levels. A 2.2% fall in East Lothian took the average house price to £187,370 whilst in Midlothian an annual decrease of 3.7% brought the average house price to £163,207.
David Marshall, business analyst with ESPC, explained: "As was the case for most of 2012, we saw a larger number of homes being bought and sold but in most areas prices are lower than they were a year ago. Buyers are using market conditions to their advantage to negotiate lower selling prices with sellers. Almost 80% of homes sold during the last three months were secured for less than their Home Report valuation.
"Sellers coming to the market today are generally more accepting of this situation than was the case a year or two ago. For example, during the first half of 2010 almost 20% of sellers coming to the market opted to set their initial asking price above the Home Report valuation. More recently just 1.1% of new properties marketed have had an asking price in excess of the valuation and this greater realism from sellers has helped stimulate sales."
West Lothian did observe a large rise in the average house price - a 9.3% increase taking the average from £142,359 during the last three months of 2011 to £155,590 in 2012. This increase came on the back of a fall of 11.1% a year ago though meaning that house prices had simply been brought back in line with 2010 levels.
David Marshall, commented: "The number of homes selling is still relatively low when compared to pre-credit crunch levels and this can lead to some short-term volatility in regional house prices if there is a change in the mix of properties selling. At the end of 2011, smaller properties accounted for a higher proportion of sales in West Lothian than would normally be seen which brought the average house price down. The increase here simply reflects the mix of properties selling in the area returning to more normal levels.
"Similarly, the rise of 10.2% that we've seen in the average house price in Dunfermline is due to an increase in the number of larger properties selling. Properties with three or more bedrooms accounted for 65% of sales in the town during the last three months of 2012 compared to 58% in 2011 and this obviously pushes the overall average up. When you compare like for like sales of properties of similar size though, house prices in the town are almost unchanged over the last year."
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