HOUSE prices in Scotland rose by just 0.1 per cent in the second quarter of 2009, flagging behind the UK-wide figure of 1.1 per cent, new data from the Nationwide has revealed.
But the increase compares with a fall of 5.2 per cent north of the Border in the first three months of the year. That brings the average Scottish house price to £134,391 – 10.4 per cent down on June 2008.
The Scottish figures come as the value of
UK property rose for the third time in four months during June as the market was boosted by a shortage of properties being put up for sale, the building society said.
The average value of a UK home rose by 0.9 per cent this month to £156,442 – while the annual rate at which prices are declining slowed for the fourth month in a row, to 9.3 per cent.
Experts welcomed the figures, but, despite property prices now being only 0.2 per cent lower than at the beginning of the year, warned it did not mean a return to growth for the sector.
Martin Gahbauer, Nationwide's chief economist, said: "While Scotland has performed somewhat better (than the rest of the UK], it has not been able to escape significant falls as it did in the last downturn."
On the UK-wide figures, he added: "While it is encouraging to see that prices are no longer seeing steep falls, there are still many obstacles in the way of a genuine and sustainable price recovery.
"To begin with, abnormally low supply levels are unlikely to last forever, as the recent price increases should make previously hesitant sellers feel more confident about marketing their properties."
Howard Archer, chief UK economist at IHS Global Insight, said: "We are still far from convinced that house prices have bottomed out and we certainly do not think we are at the start of a renewed sharp upward trend.
"While buyer interest has clearly picked up markedly in recent months, this is only slowly translating into increased house sales."
The housing market has seen signs of a recovery in recent weeks as data suggested buyers were being lured by relatively low prices and low mortgage rates.
But figures released at the start of the week by the Bank of England showed that the number of mortgages approved for house purchase had levelled out at about 43,000 during May.
Economists said that figure, which was below their expectations, highlighted the fragile state of the market.
Nationwide yesterday pointed out that the stabilisation in prices had come despite very low house purchase activity as there had been a corresponding drop in the stock of property for sale.
The lack of properties on the market is likely to be a result of potential sellers and builders holding on to their properties waiting for an upturn.
