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Housing market in Scotland showing signs of recovery

Aberdeen has seen one of the largest increases in house prices over the last quarter.

16 November 2009 07:00 GMT

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Housing market in Scotland showing signs of recovery

A new report says the housing market in Scotland is beginning to recover.

According to the latest Scottish House Price Monitor from Lloyds TSB Scotland, the average price of homes north of the border has risen 0.7% in the last quarter. 

Aberdeen has seen one of the biggest increases.

House prices have gone up in four of the last seven months after reaching their lowest point in March.

The number of transactions in October was 33% more than in May, when it was at its lowest point.

On an annual basis, Scottish house prices have fallen by 7.5%, but economists said there were signs the market was now on the up.

Professor Donald MacRae, chief economist, Lloyds Banking Group Scotland, said: "Consumer confidence has recovered from the lows of one year ago and is now back in positive territory but is still below the levels of pre-credit crunch.

"The cost of borrowing has reduced for many mortgage holders while there is now a perceptible increase in the level of mortgage availability including first time buyers.  The Scottish housing market is beginning to recover."

The increase of 0.7% in the latest quarter follows a price fall of 1.4% in the previous quarter and a fall of 4.3% in the quarter before that.

There are marked differences in price changes across the country, with rises in some areas and falls in others.

Aberdeen has seen the biggest increase, with prices going up 13.4% in the last quarter, while the north, excluding Aberdeen, has seen a 6.9% rise.

However Edinburgh and Glasgow have not fared so well, with 11.8% and 9.8% price decreases respectively.

The report said that price movements in the latest quarter were particularly volatile with larger swings than normally experienced over the last ten years.

On an annual basis, prices have decreased in all areas of Scotland, ranging from a 0.7% drop in the south east (excluding Edinburgh) to a 9.8% slump in Dundee.

A home in Scotland now costs on average £153,605.

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