Robust growth in property values in West Central Scotland revealed
Issued: Wed, 23 Oct 2002 00:00:00 BST
Property prices in West Central Scotland are rising at over 10 per cent a year according to the first authoritative survey of selling prices in the area. The average price of a property in the area is now £71,818 ﾖ £7,208 higher than a year ago. The rate of growth has, however, moderated in the last few months according to the report issued by GSPC - the first firm indication that price rises are returning to more sustainable levels.
This report is the first to provide reliable price information on Glasgow and the West of Scotland, the largest urban conurbation in Scotland. It has been compiled by the Urban Studies Department at Glasgow University, a national leader in the analysis of property data, together with GSPC, the largest property marketing organisation in the area, and Communities Scotland, the housing agency set up by the Scottish Executive.
The report reveals that price rises reached their peak in the middle of this year. Between June and August, prices in West Central Scotland were rising at an annual rate of 14.8 per cent. In the West End of Glasgow, widely held up as an example of a 'hot spot', the annual rate of increase even reached 23.2 per cent. By the start of October, however, the annualised rate for the area as a whole had slowed to a more sustainable 11.2 per cent while the rate of growth for the West End was 14.6 per cent.
In general, prices have risen strongly this year across Strathclyde and in Glasgow. Every area of the city has seen increases in value, including previously struggling areas such as the East End where prices are now rising at 14.9 per cent a year - above the average rate of 9.1% for Glasgow as a whole. The West End is the only area where average property values have broken through the £100,000 barrier. But although this area experienced the highest rate of growth in the middle of the year, properties values are now rising faster in the South Side of the city than they are in the West End.
Commenting on the report, GSPC Chairman, Michael Samuel, said 'These figures represent the end of the road for anecdote, hearsay and gossip about property prices, giving homeowners a reliable benchmark of activity in the market for the first time.
'The key point to take from these figures is that property prices are continuing to rise, but not as fast as they were doing in the middle of the year. From an historical perspective, the current rates of increase are very healthy and we believe that the property market will be strong into the rest of this year and the start of next. Although it may be repetitive to say it, consistently low interest rates are making mortgages more affordable than they have been since the advent of widespread home ownership. This, together with a shortage of properties on the market and above inflation rises in earnings are driving and sustaining the rise in prices.
'The indications in the last quarter that the rate of increase is slowing should, in my view, be seen as welcome news. The rate of price rises earlier this year were clearly unsustainable in the long term and it is encouraging to see the market move toward an equilibrium of its own accord without outside intervention. The Bank of England has publicly said that one of the considerations preventing a further reduction in interest rates is the strength of the property market. If these trends are matched elsewhere, the prospect of a cut in rates will come that much closer'.
Analysis was carried out by Dr Gwilym Pryce, Department of Urban Studies, University of Glasgow.
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Dr Gwilym Pryce BA Hons, MSc (Econ), PhD (Econ) is the Deputy Director of the Graduate School (Faculty of Social Sciences), the Faculty Lecturer in Social Science Methodology, and a Lecturer in Housing Economics in the Department of Urban Studies, University of Glasgow. He has published widely in the areas of housing and mortgage markets and has conducted research for a large number of funding bodies including Department of the Environment Transport and the Regions, Council for Mortgage Lenders, Glasgow Solicitors Property Centre, Economic and Social Research Council, Welsh Assembly, Federal National Mortgage Association, Scottish Homes/Communities Scotland, European Commission, National Housing Federation, Monopolies and Mergers Commission and the Scottish Office. He is the Economics Adviser to the European Journal of Housing Policy, an Economic Consultant to the SCOC programme (Napier University) and a member of Editorial Board of the Journal of Property Research.
The Department of Urban Studies, University of Glasgow is a 5 rated research department reflecting its national and international status in the areas of housing and urban research. It is the home of two collaborative national research centres: the ESRC Centre for Neighbourhood Research and the Scottish Centre for Research on Social Justice (in collaboration with the Universities of Bristol and Aberdeen respectively).
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