Prices go upstairs downstairs
You'd be forgiven for being confused. It would be good to offer you something to steer you through the thicket of house price surveys, but there's a risk this may merely confirm you have every reason to be perplexed.
Let's boil the latest three surveys down to the essentials:
Lloyds TSB Scotland says Scottish house prices in the quarter to the end of January fell by 6.8% when compared with a year before.
Halifax Bank of Scotland, looking at the year to the end of December, nearly agrees, with Scottish average valuations down 7%.
But on the same day the Lloyds TSB numbers came out, the UK Department of Communities and (English) Local Government announced that Scottish prices in the year to the end of December had risen by 3.8%.
Des res confusion
So far, so confusing. But what about the comparison?
Halifax Bank of Scotland says that while Scottish prices fell 7%, the UK average rose more than 1%.
But the UK government's figures suggest that the UK average was 2.9% higher - meaning Scottish prices were rising more steeply than anywhere else.
Lloyds TSB Scotland spared us the confusion of having a UK comparison.
Why the difference? It could be the slightly different timings included, including the factor of December bringing the end of the stamp duty holiday for lower-priced properties.
But methodology plays a part. The surveys draw on a combination of officially registered transactions and on the details of completed mortgage loan agreements.
First time caution
This may give undue weight to homes that are bought with mortgages - a dominant share, but by no means all of them.
And then weightings are applied for property type and for the time of year, the way statisticians like to do.
So what are we to draw from this? That the property market is far from functioning well. All are agreed that the number of transactions is down by around half, and that in itself can skew figures.
The mortgage market is turning more competitive (at the expense of those who look to interest rates on their savings).
But there remains a lack of sellers, buyers and of confidence. It's far from clear that the stabilisation of prices in the past eight months or so is assured.
Another dip is a real possibility. And there are those who argue that would be no bad thing, as prices still look daunting for those first-time buyers who are needed to kick start the property market.
Sausage sizzle
Things are cooking nicely for the finances of Devro, based near Cumbernauld.
Profits are up 76% last year, on sales of £220m. The global leader in making collagen food casings, or sausage skins, has good reason to add a celebratory dod of ketchup.
Its results illustrate the Paradox of the Sausage.
Figures are up because, in developed countries such as Britain, sausages are more popular in recessions, as people trade down to cheaper cuts of meat.
But in developing countries, where recession isn't biting as deep, sausage sales are also up because the growing middle classes are trading up to meat and protein, and the collagen-wrapped banger is a modern, westernised way to consume it.
The strategy for Devro is to expand its Czech and Australian factories, and also to go for the "gut conversion", proving to sausage-makers and consumers that collagen, made from animal skin, is preferable and more reliable in production than the more traditional stuff from the stomach.
Tasty.
Hullo, I'm Douglas Fraser, and I'm business and economy editor at ´óÏó´«Ã½ Scotland. Welcome to my blog, where you can read my take on money matters, viewed from a Scottish perspective.
Comment number 1.
At 17th Feb 2010, Gary Hay wrote:Turning the UK into a nation of property speculators has been the primary cause of personal debt in this country - as well as the primary cause of the extreme shortage of affordable housing, resentment at the benefits system for allocating what little housing there is to those who contribute the least to society and finally, the reason the financial crash almost brought the worlds economy to it's knees.
The old adage "money goes to money" has never been truer in the respect of the last 20 years. I rented for 10 years at extortaionate rates per month - so I know only too well how much money of mine was used to pay off someone elses mortgage. Before anyone lays in with a condescending remark - to buy a house without a significant deposit would have resulted in someone with a modest income taking out a 100% mortgage - Look where that train of thinking landed us. (Sub-prime mortgage crash etc)
I feel no sympathy for people who borrowed 120% of thier mortgage on thier second homes, because those people were most likely getting some poor sod to pay off the mortgage for them.
This practise is not only terribly unfair, it is driving a massive wedge between those who can afford to buy proprties and (in my opinion) abuse it by getting greedy - and those who simply want to enter thier later years with no mortgage. The greedy get rich and everyone else suffers.
Those of you who advocate the free market system might well snort your disapproval, but to follow down the road we've taken for the past 20 years will lead to certain ruin.
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Comment number 2.
At 17th Feb 2010, handclapping wrote:Mr Fraser
Part of the problem is that houses are seen as a store of money. If we have endless speculation they may appear to be so for a short while. If the Governments were to do something sensible like build standard houses to modern levels of energy efficiency etc in factories in the Central Belt and erect them in places like Kyle and Ullapool, it would not be long before they could make housing benefit claimable only by those in work or recently unemployed. This would prevent the occupation of housing in "working" areas by those who see unemployment as their lifestyle choice and their dispersion to the less populated parts of our country, where rents would be cheaper due to the abundance of housing.
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Comment number 3.
At 17th Feb 2010, loveandgarbage wrote:Perhaps it might be more useful to wait for the official statistics from the Registers of Scotland which will give detail of the number of transactions (including sales/other disposals and enough information to identify the volume of remortgages) as well as average prices on a registration county by county basis, rather than speculating here? Of course an FoI request to the Registers of Scotland could reveal accurate information for the whole country (and include property purchased without a standard security as well as property bought with secured loan finance) rather than relying on the partial information from two lenders. And on what basis is the calculation by the English government department made?
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Comment number 4.
At 18th Feb 2010, stanblogger wrote:It looks as if, in England at least, the house price bubble is being allowed to get going again.
Politicians bemoan the poor savings ration in the UK, comparing it unfavourably with, for example, Germany. Is it not obvious that the reason for this is that investing in the most expensive house one can afford is by far the best thing to do with any spare cash, and that this is the result of deliberate policy?
Many people who bought a home back in the 1960s or 1970s, find that the capital gain they have made, entirely tax free, exceeds their total lifetime earnings by honest toil, and furthermore they have been able live rent free.
The Heath government abolished schedule A tax, which was supposed to charge tax on the benefit of the virtual rent earned by investing in your own house. The Thatcher government abolished the rates based on rental values. These measures and the exemption of owner occupied houses from capital gains tax, must be responsible, in part, for the vast private housing debt over hanging the UK economy.
We hear nothing about reforming this system, only about cuts in public expenditure, on which non-house owners particularly have to rely.
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Comment number 5.
At 18th Feb 2010, rog_rocks wrote:Lloyds TSB Scotland, what a joke;
But am sure the Dark Lord appreciates it and considers it a job well done. I wonder if the Emperor rewarded his apprentice by giving him a sausage of his own?
"Something, Something, Something, Dark Side.
Something, Something, Something, Complete."
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