“Reality Gap” narrowing says house price report.

Our latest quarterly house price report shows a further reduction in the Reality Gap (the difference between what house sellers hope to sell their properties for and the price they actually achieve) as sellers achieve higher prices.

The s1homes Scottish house price report reveals that the average asking price across Scotland fell by almost 1% to £167,619, in the 3 months to September.  The average price that properties were actually sold for (as reported by Registers of Scotland) increased from £153,501 (April to June) to £159,310 (July to September), up 3.8%.  This means that while sales volumes are down, the average property in Scotland is now selling for around 5% less than the asking price, compared to almost 10% less in the previous quarter.

Sales of flats, terraced and semi detached houses are achieving above their asking prices, however the Reality Gap remains wide for detached houses with the average selling price at almost 18% below the average asking price.

Commenting on the report, Andrew Watt, Managing Director of Residence Estate Agents said: “Whilst many areas of the market have seen noticeable improvement over the past 6 months and a degree of confidence has returned, the market still remains price sensitive. Initial asking prices are crucial to achieving a successful sale with 84% of our properties selling in excess of their asking price during this period. Whilst we don’t expect house prices to rise significantly in the immediate future, we do expect confidence to continue to grow and activity levels to increase during 2013.”

Across Scotland, the majority of regions saw a decrease in the Reality Gap due to an increase in the average price achieved as asking prices began to fall. However, Argyll & Bute, Falkirk, Renfrewshire/Inverclyde and West Lothian all saw increases in the Reality Gap as selling prices fell.

Edinburgh has once again bucked the trend, along with East Lothian, with the average property being sold for more than the asking price.

The report, published quarterly, samples around 25,000 properties advertised on s1homes.com every month and provides trends in the various property markets throughout Scotland. For more information visit www.s1homes.com/house-price-report/.