House Prices Rising

Confidence in buying houses appears to be growing in Scotland, according to a property firm.

Selling prices have increased significantly to almost match average asking price levels.

They've risen 6percent, or more than 9 thousand pounds, since this time last year, meaning the 'reality gap' between asking and selling prices is decreasing.

s1homes says the results show that buyer confidence is growing, but warns that some Scots could struggle to buy properties.

The report also shows that there's no evidence of a ‘Reality Gap’ for owners of semi-detached houses, terraces and flats in Scotland as prices achieved for their properties exceeded asking prices.
 
Flats and terraced houses have enjoyed the fastest growth in prices, compared with Q1. Flats continue to sell way above their asking price, typically changing hands for around £18,000 more – up from £11,000 last quarter.  
 
Terraced houses sold on average for £11,000 more than asking price, while semi-detached houses saw an average rise of £8000 in selling prices.
 
Ewan Stark, Managing Director or s1homes, said: “Emerging evidence of the disappearance of the ‘Reality Gap’ is significant. The fact that properties are selling for more than asking prices is further proof that buyer confidence is continuing to grow in Scotland.
 
“But rising prices are not good for everyone as it can mean certain groups of buyers, such as first time buyers, can find themselves being outpriced. It is important the property market in Scotland continues to grow in a steady and manageable way.”
 
Eric Curran, Managing Partner of Chartered Surveyors, DM Hall said: “A comparison with last year’s figures for the same quarter reflects a similar seasonal trend.
 
“Last year’s average Q2 asking price was significantly higher, while the average selling price was considerably lower than this year.
 
“Average selling prices this quarter have increased with more realistic asking prices also being set, meaning the reality gap reduced to less than £2,000. This emphasises our position that a sensible and realistic asking price will in turn lead to a more favourable selling price.”
 
Robert Carroll, of Move8 Real Estate, added: “Factors such as the government-assisted Help to Buy scheme and historically low interest rates   have contributed to both rising prices and a narrowing of the 'Reality Gap'.
 
“There is no doubt that the imbalance between buyer confidence and seller activity in the past few months has caused house prices to rise and has led to us seeing a higher proportion of properties selling, far more quickly, than they have done in the past few years.”
 
Detached properties are the only property type where a ‘Reality Gap’ still exists in Scotland, this has remained at 13% for a second consecutive quarter as both the average selling and asking prices increase. Typically, detached houses are selling for £37,000 less than their asking price.
 
Regionally, East Renfrewshire experienced the biggest increase in average asking price, up nearly 3.71%, a significant change from the 4.6% drop recorded in the first quarter of the year. Only three regions recorded a drop in asking prices – although the changes were small; South Lanarkshire (0.05%), North Lanarkshire (0.90%), Stirling/Clackmannanshire (1.37%).
 
Across Scotland and Argyll & Bute and East Lothian both lay claim having the largest ‘Reality Gap’ in Scotland (at £28,000 and £27,000 respectively), although both have seen average selling prices rise considerably which also significantly reduced their ‘Reality Gap’.