Property values to fall - but not in Scotland

Published:  15 September, 2010

LONDON: House prices are too high for most first-time buyers and prices are expected to fall over the next three months according to a survey by the Royal Institution of Chartered Surveyors (RICS).

The number of house sales fell back in August to levels last seen during the worst of the recession in 2008. The Council of Mortgage Lenders (CML) found in its July report that first-time buyers remained reluctant to step back into the market after banks and building societies tightened their lending criteria.

The CML and RICS surveys follow a series of predictions from house builders and lenders that prices will deteriorate sharply in the next 12 months. Barratt Developments, the country's largest house builder by volume, said market conditions continued to be tough. Berkeley, a rival developer, said that although trading remained resilient in London, elsewhere a lack of credit and shattered consumer confidence were a drag on sales.

The position in Scotland is different: the only part of the UK to buck the downward trend in prices.

Sarah Speirs, deputy director of RICS Scotland, said: "What we are reporting is a levelling out of the Scottish market which puts us at odds with the rest of the UK.

"Demand is starting to weaken but prices being supported by continued falls in supply."

She added: "Surveyors in Scotland are confident that prices will rise moderately over the next three months.

"However, the situation as ever is fluid and highly dependent on the scale of public sector spending cuts and the performance of the wider economy."

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