While this blog does not usually focus entirely on any one part of the UK, the figures released yesterday by Lloyds TSB Scotland require some comment. They show that Scottish house prices have fallen dramatically in the past three months.
The bank’s Scottish house price monitor reported the average Scottish house price was £152,565, almost the same level as early 2007.
This means that, in the three months ending July 2011, the quarterly price index for the average domestic property in Scotland fell by 3.7%.
The number of sales was reported to be low, but had increased since winter, with house purchases recorded in the last quarter 27% up on the previous three months.
However, the number of housing market transactions was still less than half pre-recession figures.
With growing concern over the economic and social North-South divide of the UK, this news is as worrying in London as it is in Scotland itself. The regional disparities between London and other parts of the country is growing by the month and acts as bots a signpost and catalyst for other economic divergence.
A spokesman for Lloyds TSB Scotland made the point that the Scottish housing market has adjusted to the recession with a halving of sales and a period of volatile price movement over the last three-and-a-half years.
However, this means that average house prices in Scotland are now only marginally up on the levels of four-and-a-half years ago.
The Scottish housing market did experience the normal effect of spring this year on sales and purchases but the impact was much more muted than in other years.
The Scottish economy more generally has seen the weak housing market coupled with a drop in disposable income because of retail inflation exceeding earning increases hitting consumer confidence to a greater extent than in England.
To ensure a recovery in the housing market, the economy north of the border now needs a resurgence of both business and consumer confidence even more than the north of England. This will require the disparate politicians in control of the legislatures of London and Edinburgh to put their differences aside and work together to solve the problem.