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Scotland’s detached houses go up in value

Recent research from Bank of Scotland has shown that 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.

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.

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.”