Property prices fall again for second month

STV
Slump: Sales have fallen away due to a lack of available finance.© STV

Property prices have fallen for the second month in a row with the majority of first-time buyers "stuck" in the rental sector because of the need for large deposits.

The LSL Property Services/Acadametrics house price index for November showed prices fell by 0.2%, taking the average house price to £147,202.

Figures revealed the price of flats fell by 2.2%, reflecting the struggle faced by first-time buyers.

Prices were highest in Edinburgh and Aberdeen, where the average house costs a respective £217,193 and £183,822.

The average cost in Glasgow was £130,747, in Stirling it was £175,790 and in Inverness it was £152,489.

Dundee recorded the lowest average price of £115,104.

Gordon Fowlis, regional managing director of Your Move which is owned by LSL, said: "Although prices are pretty much flat in 2011, they've shown tremendous resilience given the bleak economic backdrop. The upshot of flat prices is that high inflation is slowly making property more affordable.

"Mortgage finance — for those who can access it — is at its cheapest for some time. This is sustaining activity in some sections of the market, specifically buy-to-let investors and existing homeowners who are looking to upgrade.

"It's a different story for first-time buyers, who are being required to build up large deposits to secure a mortgage. The majority of them are stuck in the rental sector because banks are focusing on lending to wealthier buyers, particularly since the situation in the eurozone has taken a turn for the worse."

He added: "Things will be just as tough for Scottish first-time buyers in 2012. The Council of Mortgage Lenders has done its best to map out a positive year for the mortgage market, but the terrain looks fraught with danger."

The data was compiled using figures from Registers of Scotland, showing how much each house sold for.

Dr Peter Williams, housing market specialist and chairman of Acadametrics, said: "The average price of a house in Scotland fell by -0.2% in November, following a -0.1% reduction in prices in October.

"However the fall in money terms over these two months is relatively small, being just £335, which indicates that the housing market is in near balance, as opposed to in freefall.

"Our Scotland House Price Index now stands at 199.6, a figure similar to that seen in January 2010 (199.2), suggesting that house prices have been relatively stable over the last two years, despite the turmoil seen in the financial markets over this same period."