Detached property owners continue to advertise at unrealistic selling prices, according to latest s1homes Scottish House Price Report
- Detached houses present biggest Reality Gap at 18%
- Overall Reality Gap narrows slightly from 10% in previous quarter to 9%
- Average asking prices rise but not as much as actual selling prices
- Flats and terraced houses continue to sell above their asking price
The latest quarterly house price report to be published by Scotland’s biggest dedicated property website, s1homes, shows that flats and properties at the lower end of the market are continuing to sell for more than the asking price, but detached properties are still suffering from a significant “Reality Gap” (the difference between what sellers hope to sell their properties for and the price they actually achieve).
On average properties in Scotland sold for almost 9% less (£14,590) than the advertised price, a reduction from 10% last quarter, with detached properties being sold for 18% less than the average asking price, while flats and terraced housing achieved an average of 5% (£5,850) and 2% (£2,150) above their asking prices.
This quarter both the average asking price and average selling price increased in Scotland, the first time that’s happened in 12 months. The most significant impact was on the average selling price of flats which increased by almost 4%. The recent Registers of Scotland figures show that volumes of completed sales are also up (8% year on year)
Mark Smith, Managing Director of s1homes said: “I think what this quarter’s report shows is that there are distinct signs there’s a bit more confidence in the overall market which is leading to prices starting to creep back up, particularly at the lower end of the market. That’s not necessarily good news for the first time buyer but will encourage those who see property primarily as an investment. What’s also apparent is that owners of detached properties are firmly sticking to their guns despite no evidence of buyers being willing to meet their expectations.“
Commenting on the report, Ken McEwan CEO of McEwan Fraser Legal said: “Quarter 1 and 2 of 2013 have been our best quarters on record with almost 40% of all our properties going to a closing date with many of our client’s properties achieving in excess of the home report value. The market is being driven by the availability of lower deposits rather than the actual cost of borrowing which is still considerably lower than it has been for a generation.”
The Reality Gap has fluctuated regionally across Scotland. Stirling/Clackmannanshire saw the largest increase in the Reality Gap, where properties are now selling for 23% below asking prices. Asking prices increased in Edinburgh by almost 5% which was the most sizeable increase for the quarter. The most significant growth in selling prices was in Renfrewshire/Inverclyde where the average selling price of a property increased by over 6%.
The House Price Report, published quarterly, samples around 30,000 properties advertised on s1homes.com every month and provides trends in the various property markets throughout Scotland. The full report including regional breakdowns is available at www.s1homes.com/house-price-report.