Homeowners in Scotland have failed to gain any ground on equity recovery as it has been reported that house prices in Scotland have fallen to almost £3,000 in the last two years.  The average house price in Scotland for January was reported at £145,607.  This is the lowest average since December 2009 according to LSL Acad Scotland House Price Index.

January’s decline in house prices was the fourth consecutive month to report a decline.  Compared to December 2011 there was a 0.9 per cent loss in house prices.  Experts are blaming the decline on the inability of first time buyers to gather a purchase deposit.

Gordon Fowlis, regional managing director of Your Move, remarked, “Prices spiraled downward in January.  House prices usually fall over the winter months as would-be buyers nurse their finances back to health after Christmas.

“But this is bad news even compared to this time last year. That's not to say people aren't still keen to move home. The root of the problem is how hard it is to get a mortgage. Banks just aren't lending.

“The dwindling number of new buyers at the bottom of the market has choked off activity in the higher echelons of the property ladder. This is forcing sellers to slash their asking prices and is stymieing any chance of prices rehabilitating to their previous highs.”

While first time buyers are being kept off of the property ladder due to the inability to gain loan approval, the lack of buyers in the market is causing house prices to decline.  As house prices and property values decline homeowners are losing equity.  The lack of equity is hurting homeowners and making it difficult for them to gain approval for a remortgage.