THINGS are looking up for homebuyers in Scotland, with prices down almost £1,500 over the past year.

The average cost of a home has fallen for the last three months, to £146,913, encouraging buyers to take advantage of the trend.

Sales have more than halved since 2007—but in December, they rose 2.5 per cent compared to the previous month.

The latest figures come from the LSL/Acadametrics House Price Index for 2011.

Gordon Fowlis, regional managing director for estate agent Your Move, said:

‘Credit should go to mortgage lenders who have done their best to sustain lending.

‘They have operated astutely and picked their battles carefully, pushing out a raft of higher loan-to-value mortgages last summer, which has increased the trickle of first-time buyers to a more steady flow.’

The picture is mixed across the country, with house prices rising by 22 per cent in a year in the Western Isles, and falling 14 per cent in East Lothian.

But in Scotland as a whole, they have stayed steady—down 0.2 per cent from November to December and down 1 per cent from 2010′s average price of £148,381

The latest figures continue a trend which has seen prices fall since April 2010, according to LSL Property Services.

Registers of Scotland has previously estimated Scotland’s average house price to be £157,174.

SCOTLAND has become a buyers’ market, with homeowners slashing their prices—but still being offered an average of £9,000 below the asking price.

The power is in the hands of the buyers because there are so few of them, with sales stalling as deposits rise and banks refuse to lend.

In an effort to attract offers, sellers have been forced to drop their asking prices by 3.33 per cent in three months to an average of £166,494.

Figures from the s1homes Scottish House Price Report show the average total properties sold for has fallen even further—from £163,068 to £157,174.

Mark Smith, managing director of s1homes, said:

“It would appear that while sellers are being less optimistic about the prices they can achieve, buyers are still able to come in with offers under the asking price in these market conditions.”

Price-sensitive

Stuart Ferguson, of Allen & Harris estate agents, said:

“We continue to be in the midst of a price-sensitive buyers’ market and uncertain economic times. Many vendors are willing to take a reduced offer if they themselves can then buy their new home at a reduced price.”

“Buyers are very much guided by Home Report values but in Scotland a positive sign has been that many properties are taking less time to sell.

“If a newly marketed home is sensibly priced for the market, the chance of a quicker sale is then far greater.”

Homes have now been steadily selling for £9,000 below the asking price for six months north of the Border. The latest figures from Register of Scotland suggest that is because of slack demand, after house sales plummeted to 19,828 from October to December last year.

The slump—to less than half of the sales seen in 2007-08—has been fuelled by a dearth of first-time buyers.

Increasing numbers are unable to pay average deposits of more than £26,000 and are holding off going on to the property ladder until they reach an average age of 33. But those who can still afford to buy have the power to haggle, and there are bargains to be had.

Trapped

In Ayrshire, asking prices stand at £148,688 pm average but properties are selling for £128,229—about £20,000 less.

However, Edinburgh has homes selling for more than the asking price and in Glasgow the gap between the price asked and the price offered is narrowing.

At the upper end of the market, sellers seem less prepared to accept offers below their asking price and buyers are more reticent.

The £3million period mansion Inverell House, in Dirleton, East Lothian, and £2.3million Spott House near Dunbar, also in East Lothian, are failing to shift, despite being on the market for months.

There are fears some homeowners may end up trapped in their homes if they are not prepared to slash their prices.

However, there is some good news for sellers.

While £157,174 may be £9,000 below the average price hoped for, it is the second highest average selling price seen since records began in 2003.

Estate agents say that the market appears to be ‘turning a corner’ and if that is the case, it could be a sellers’ market again soon.

Scots prices have stayed relatively buoyant for four years, despite the economic crisis that began in 2007 with the fall of Northern Rock.

victoria@dailymail.co.uk

HOMEBUYERS are still offering less than the advertised cost of a property despite more sellers dropping the asking price, according to a new report.

The average property sold for around £9,000 less than the asking price in the three months to December, the s1homes Scottish House Price Report said.

It found the average asking price fell by 3.33 per cent to £166,494 but the average price properties actually sold for also decreased from £163,068 to £157,174.

This means the average home in Scotland is still selling for around £9,000 less than the asking price, the same as the figure for the previous three months.

Mark Smith, managing director of s1homes said:

“It would appear that while sellers are being less optimistic about the prices they can achieve, buyers are still able to come in with offers under the asking price in these market conditions.”

Edinburgh was the only region where the reality gap disappeared as selling prices overtook asking prices.

Most regions saw an increase in the reality gap, even though asking prices were generally falling, as the selling prices fell further.

AT LAST it looks like the lenders are trying to help stimulate the market as another two lenders launched 95% mortgages this week.

At least ten lenders are now offering high LTV mortgages to help people with minimal deposits to still buy their own home. One lender will even consider 100% loan to value mortgages where a parent is willing to be a guarantor.

Paul Winter, chief executive of Ipswich Building Society, says: “We believe that everyone should have the opportunity to purchase their own homes and we understand that saving for a large deposit is not a realistic option for many.

As a result, we have worked hard to ensure that our portfolio of mortgage products provides access for a wide range of home buyers and those looking to remortgage.”

It is fantastic to see these mortgages with innovative features such as ‘rent a room’ schemes and extended mortgage terms to help with people’s affordability to allow them to purchase their own homes.

If you would like to find out more about these products contact Connect IFA online or call 01708 676133 to speak to an adviser.

THERE has been little to shout about in Scotland’s housing market over the past four years—yet while activity remains subdued, not everyone is losing.

The buy-to-let market helped drive the unsustainable surge in house prices in the mid-2000s before it was hit hard by the credit crunch and the banking crisis. Some lenders stopped offering buy-to-let mortgages, others tightened lending criteria and, as house prices slipped, countless amateur landlords found themselves in negative equity.

So you wouldn’t have tipped buy-to-let investors to be among the beneficiaries of the slump, but it’s turning out that way. Private landlords account for almost a fifth of UK residential housing stock after a 40 per cent increase in their share of the market since 2007, estate agent Savills recently estimated.

The lenders are back too, with Clydesdale Bank this week becoming the sixth lender with buy-to-let loans requiring no more than a 20 per cent deposit.

The reason for the rebound in buy-to-let? Instead of soaring property values, it’s a combination of rising rental prices, a shortage of housing supply and the squeeze on first-time buyers.

Reluctant

Strict mortgage criteria means would-be buyers without substantial deposits are unable to get on the property ladder. Instead they are renting in ever growing numbers—and for longer—driving up demand for rental property and prices.

That leaves private landlords—considered by some the villains of the housing market boom and bust for fuelling property speculation—once again propping up house prices and potentially making life even harder for would-be buyers.

That doesn’t make it a great time to get into buy-to-let, however. Supply of rented property has been helped by the reluctant landlords unable to sell their homes and who have instead rented them out when moving. And you need a chunky deposit of at least 25 per cent to get a decent deal. But affluent investors with enough spare cash lying around, many of whom have seen their savings eroded by inflation and low interest rates, are once again looking seriously at buy-to-let as a way to boost their incomes.

They have to be selective, however. While rents in Edinburgh and Aberdeen are on the up, average prices in Glasgow have fallen over the past three years, according to both Citylets and estate agent  DJ Alexander. The average monthly rent for a two-bedroom flat in Scotland increased by 1.5 per cent to £626 in the year to the last three months of 2011, said Citylets, while one-bedroom flats were up 3.6 per cent to £490.

BUYING a home in Scotland is 6 per cent cheaper than renting, according to a new study.

Average monthly mortgage payments for a three-bedroom house in Scotland were £510 in December, £30 lower than the average monthly rent of £540 paid on the same property type.

This was a “significant” reversal of the situation three years ago, when the average cost of buying was nearly half as much again (47 per cent) as the the average rent.

The Bank of Scotland, which carried out the research, said the monthly cost of buying a home has fallen by more than a quarter—£330—since 2008.

It had been driven by a 37 per cent (£250) decline in the average monthly mortgage payment due to the marked fall in mortgage rates and house prices.

Affordability

Over 2011, buying costs fell by 6 per cent, while renting costs rose by 1 per cent.

However, the number of buyers entering the market has continued to decline. Would-be buyers still face the hurdle of raising a deposit and are likely to face a tougher time securing a mortgage this year, with lenders expected to tighten borrowing criteria because of the weak economy.

Typical rents have been pushed up as those who would like to buy have been left trapped in the rental system and concerns have been raised that transactions could hit a record low this year.

Nitesh Patel, housing economist at the bank, said: “The affordability gains for buyers in Scotland relative to renters in the last three years have been significant, albeit less than the improvement in buyer affordability across the UK.

“The average mortgage payment has fallen over recent years as a result of falling house prices and mortgage rates.

“Nonetheless, the number of purchasers has continued to fall due to the ongoing challenges in raising a deposit and the considerable uncertainty over the prospects for the economy, which have severely constrained housing demand.”

The mortgage rate for a new borrower has been reduced to an average of 3.63 per cent in 2011 from 5.75% in 2008, while the average house price has dropped by 17 per cent over the same period, the study found.

The current cost of buying in Scotland, at £510 per month, is 15 per cent lower than the UK average of £600.

Scotland is currently one of the most cost-effective parts of the UK for buying relative to renting, according to the bank.

Read more at http://edinburghpropertynews.com/buying-cheaper…ed-on-its-head/

STATIC house prices have now made Scotland the most affordable place in Britain to buy a home.

According to Registers of Scotland latest figures, average prices at the end of December 2011 were exactly the same as they were at the end of 2010—and research by the Bank of Scotland suggests that the combination of depressed prices and low interest rates makes houses north of the Border uniquely affordable.

According to the Bank, both first-time buyers borrowers can expect to pay, on average, just 20% of their disposable income on mortgage payments, compared with a 27-year average of 30%.

“Scotland has seven of the 10 most affordable local authority districts in the UK,” says Nitesh Patel, the bank’s hyousing economist. “East Ayrshire is the most affordable—mortgage payments account for just 15.7% of average local earnings there.”

ros.gov.uk

SCOTTISH housebuilder CALA group said yesterday it had extended its debt facility with Lloyds, while sales of its homes continue to recover.

The Edinburgh firm said the new £180 million facility was secured on broadly the same terms as its previous agreement with the bank, adding that the group planned to reduce its borrowing in the medium to long term.

CALA also reported that it had sold 322 homes between 1 July and 6 January, up 12 per cent on the same period a year earlier. Prices have risen 2 per cent with the average selling price now standing at £290,000.

The group has just over 3,000 plots in its land bank and said it would continue to buy land with planning prospects in “marketable locations”.

It returned to the black last year for the first time since the financial crisis. Yesterday it said the positive momentum had continued.