Richard Sexton, director of e.surv chartered surveyors, part of LSL, comments: “The headline figures suggest the housing market is slipping back into the deep hole it found itself in during 2009, but it isn’t time to start ringing the alarm bells just yet. There were ‘freak’ factors in play over the summer which affected August prices: various summer events and the torrent of rainfall.
The market hasn’t suddenly become a lot weaker. First time buyer numbers are up 9% so far on last year, demand is still strong, and high loan-to-value mortgages are more widely available. August should prove to be just a blot on the copy book of recovery.
Areas of Scotland were deluged with twice the normal amount of rainfall, which discouraged plenty of second time buyers from going out and viewing properties. And the Olympics took up people’s spare time. Lots of potential buyers will have put their property search on hold for a few weeks and used their leisure time to watch the sport. This may why sales were down 6% on July.
In the longer term, the feeling around the market at the moment is one of cautious optimism. This year has seen a tentative recovery in first-time buyer numbers. But it is a fragile recovery which could easily be shattered by a sharp downturn in the economy. And if the Eurozone crisis flares up again mortgage lenders will have their hands burnt, which will make it much more difficult for first-time buyers to get a mortgage.
Things were more varied on a regional basis. Prices in Edinburgh continue to rollick along, thanks mainly to the greater number of wealthier buyers who live in the capital. In less affluent areas, fewer buyers have been able to meet mortgage finance requirements, which has reduced sales levels and dragged down prices as a result.”
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