Scottish house market 'on the turn'

Despite falling house prices in Scotland, there are indications that the housing market will start to bounce bank in the coming months.

Lloyds TSB made the optimistic forecast after a recent Scottish House Price Monitor by the bank showed between the start of May and end of July there was a 1.4% drop in house prices. This is considered relatively good news by bank bosses because there was a 4.3% price fall in the previous quarter.

Potential buyers seeking mortgages will be boosted by the news because as prices begin to level banks should start to sanction more deals.

In the latest quarter some parts of the country have seen a rise with prices in Dundee increasing by 22.9% and Glasgow witnessing a 5.9% resurgence.

Overall statistics show that prices have fallen by 6.2% in the last 12 months with the average price dropping from £154,727 to £152,561.

The number of properties sold in the three months up to the end of July was 38% lower than the same period in 2008, with the number of sales reaching its lowest point in May.

But since then there has been a rise in sales, with July seeing 35% more transactions than there were in May.

Average house prices also increased in both June and July, with Professor Donald MacRae, the chief economist for Lloyds TSB Scotland, stating that the property market was now "on the turn".

Professor MacRae said: "There are positive signs that not only has the bottom been reached but that a recovery is beginning to take root.

"The housing market reached its lowest point in May recording the lowest number of sales transactions and saw its lowest average price in March.

"The cost of borrowing has reduced for many mortgage holders while there is a small but perceptible increase in the level of mortgage availability particularly for first-time buyers."

He went on: "The worst of the housing market downturn has been experienced by falling transactions and an easing of prices but no precipitous collapse. The Scottish housing market is on the turn."