Value of Scotland's detached houses up by over £800 per month in past decade
29 September 2012
The value of Scotland's detached properties has increased by an average of £815 per month over the past decade, the largest increase in cash terms compared to other property types according to latest research from Bank of Scotland. Since mid 2002 the average price of a detached home has grown by almost £98,000 (or 70%) to £238,111 a decade later.
Over the past 10 years the average price of terraced houses in Scotland has grown by 85% (£52,671) to £114,921 The average price of semis has increased by 82% (£62,514) to £139,017, followed by flats (75%, by £47,781 to £111,602) and bungalows (70%, by £70,679 to £171,172).
Property price lower since 2007, but detached houses showing great resilience…
Detached houses have outperformed all other property types since the start of the financial crisis in 2007. In the past five years, the average price of a detached property has fallen by 9%. This compares with a 16% decline in the average price of semis and a 17% fall in the price of bungalows. Terraced houses (-27%) and flats (-23%) have been the worst performers.
The tightening in mortgage lending criteria since 2007 has impacted many buyers, making it more difficult for first-time buyers, in particular, to enter the market. This development is consistent with terraced houses and flats recording the largest price falls in recent years as these property types are very popular with FTBs. Terraces and flats combined accounted for nearly three-quarters (71%) of all FTB purchases during the first half of 2012 in Scotland.
In contrast, terraces (152%) and flats (126%) recorded bigger price rises than other property types during the five years before the crisis (2002-2007). Circumstances for first-time buyers were easier at this time with a much greater availability of high loan to value mortgages.
Price differences between detached and most other property types have widened since the start of the housing downturn…
The average price of a detached house is now 71% higher than that for a semi-detached home; a gap that has widened from 59% at the height of the housing market in mid 2007.
Similarly, percentage differences in prices between detached properties and terraces and flats have also widened. The average price for a detached home is 107% higher than for a terraced house compared with 67% five years ago. Since 2007, the difference in the average price of a detached house and that of a flat has more than doubled to 113% from 45% five years earlier.
Nitesh Patel, housing economist at Bank of Scotland, commented:
"The prices of those property types in Scotland that are less reliant on first-time buyers, such as detached homes, have been more resilient since the financial crisis in 2007. Nevertheless, prices of all property types in Scotland have fallen over the past five years with the biggest declines for flats and terraced homes. These types are particularly popular with first-time buyers and their sharper price falls probably reflect the difficulties that those looking to enter the market for the first time have been facing.”