Average selling prices at the start of 2012 reached £133,000, almost four per cent higher than the £128,000 reported for same period a year ago.
Nevertheless, prices remain around 11 per cent, or £17,000, below their peak in late 2007.
GSPC market reports are based on an independent analysis of sales from 180 GSPC member firms by Professor Gwilym Pryce of the Urban Studies Department at Glasgow University and includes more transactions in the west of Scotland than any other index (with the exception of the Registers of Scotland).
It is the first time since early 2010 that GSPC has reported annual house price inflation in positive territory, but selling prices have been volatile throughout the year with sharp falls followed by significant rallies.
As Professor Gwilym Pryce points out:
“It is important to note that that the rise in prices is partly due to the fact that that prices dipped sharply a year ago and have been bouncing back since then, albeit rather capriciously.”
Transaction numbers remain exceptionally low, slumping back towards levels last seen at the start of 2009 after a brief recovery in 2010. Selling times have lengthened and are now close to their peak at the start of 2011.
These factors, however, may go some way to explain the recent recovery in prices. They are both classic symptoms of sellers digging their heels in and either withdrawing from the market entirely or declining offers they consider too low.
The result is fewer and slower sales, which is why an increase in average selling prices does not necessarily indicate a recovery in overall market conditions.
The low level of new instructions mirrors the decline in sales and suggests that many homeowners are postponing a move until market conditions improve.
According to Professor Gwilym Pryce of Glasgow University:
“The increase in selling times may suggest that many sellers have reached a floor in how low they would be willing to sell for, perhaps determined by the level of their outstanding mortgage.
"As a result, they may be holding out for a minimum price, leading to a lengthening time on the market.”
Commenting on the report, GSPC Chief Executive, Mark Hordern, said:
“Significant numbers of homeowners are sacrificing a quick move to maximise their sale price. Despite the growing economic gloom, this has been made easier by historically low interest rates and sustained forbearance by mortgage lenders which have eased the pressure on borrowers.
"Moreover, the fall in the number of new instructions will ultimately restrict supply and so help to support prices. That is exactly what happened in the first half of 2010 and it could well happen again in 2012.
“Uncertainty about the future is making buyers cautious, but the low level of sales is creating pent-up demand to move and there could well be a flurry of activity once confidence in terms of the economy and in terms of property value return.”
