In the three months to 31 January 2009, the quarterly price index for the average domestic property in Scotland fell by 2.3% to give an average mix adjusted Scottish house price of £158,820. This latest fall is lower than the previous quarter and shows that the rate of decline in Scottish house prices is slowing.
On an annual basis, Scottish house prices have still risen by 1.6%, but this figure is significantly down on the 4.9% reported in the previous edition of the House Price Monitor. The volume of house purchase transactions is down 48% on the levels recorded for the same period last year.
The picture across the country is very mixed with areas reporting the greatest quarterly fall still recording an annual increase. Broadly speaking, the east of the country has witnessed price rises in the last quarter partially compensating for greater falls in the previous three months. Properties in the west have now seen prices fall in the latest quarter.
Professor Donald MacRae, chief economist, Lloyds TSB Scotland, said: "The Scottish housing market has responded to the economic slowdown with a reduction in transactions and in some cases price falls.
"The cost of borrowing has reduced for many mortgage holders with the latest fall in interest rates in early February. The Scottish housing market is adjusting to changing circumstances with reduced sales and in some cases lower prices rather than a precipitous collapse."
