Houses drop £75 a day as recession hits

By Judith Duffy
Posted: 2008/11/14

SCOTTISH house prices have recorded their biggest fall in at least 16 years, dropping by an average £75 a day in three months.

A new survey revealed prices slumped four per cent in the three months to October.

The average house price is now estimated at £165,398, compared to £172,185 in July. Edinburgh, Aberdeen and Dundee all reported drops, but Glasgow has bucked the trend with a quarterly rise.

Lloyds TSB Scotland also showed house sales have almost halved since the same period last year. However, experts described the figures as a "sensible adjustment" to the current economic downturn, rather than a collapse.

Professor Donald MacRae, chief economist at Lloyds TSB Scotland, said: "The Scottish economy is entering a significant slowdown and the market is
adjusting to lower prices and sales.

"The market is showing sensible adjustment rather than a precipitous collapse." Prices fell most sharply over the last quarter in Dundee, with a fall of nearly 12 per cent. Despite the booming gas and oil industry, the price of properties in Aberdeen fell nine per cent.

The next biggest decline was in Edinburgh, at just over seven per cent, although it still remains the most expensive place to live. Glasgow bucked the trend with a rise of 6.4 per cent, with average prices overtaking those in Aberdeen. In the South-east, excluding Edinburgh, prices also rose by 2.2 per cent.

Flats are continuing to be the most profitable property types, increasing by 4.7 per cent. But detached and semi-detached houses fell 5.6 per cent and 3.5 per cent respectively.

Although prices have slumped since August, there has been a national annual rise of 4.9 per cent. Scott Brown, of Edinburgh and Lothian-based estate agents Warners, said: "With all the negative reports, a common perception is that nobody is buying homes, but this isn't true.

"Many people are finding that, as long as they are realistic about what their properties are worth, they are able to sell and make their next move up the property ladder."