The quarterly price index for the average domestic property in Scotland has dropped by 5.8%.

The figures for the three months ending October 2012 were revealed in the latest Scottish House Price Monitor from Lloyds TSB Scotland.

The figures also show Scottish house prices have fallen by 0.3% on an annual, underlying basis.

The average Scottish house now costs £155,188 indicating that Scottish house prices are 90% of their peak at the beginning of 2008.

The housing market currently has a low number of transactions. The number of transactions is down 26% on the previous quarter and by 11% when compared to the same quarter in 2011.

Scottish house purchases during the third quarter of 2012 dropped 2.1% on the same quarter in 2011.

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September alone showed a drop in transactions by 7.7% compared to the same month a year ago.

Donald MacRae, chief economist, Lloyds TSB Scotland, said: "The previous Monitor results showed a pick-up in both activity and prices. However, that pick-up has been reversed in the latest quarter leaving average house prices at 90% of their pre-recession peak.

"Consumer confidence turned negative at the beginning of 2011 and remained negative for 18 months. The latest figure for quarter three this year shows a return to positive territory. However, consumer confidence still remains low and the rate of increase in consumer spending remains modest."

Home building industry body Homes for Scotland continues to urge the UK Government to increase the availability of mortgages and boost consumer confidence.

Chief Executive Philip Hogg said: "Many would-be buyers have assumed that they cannot get a mortgage and given up looking for a new home.

"We need lenders to send positive signals that mortgages are available and the UK Government to stimulate the wider economy and increase the general flow of both mortgage and corporate lending which continue to hamper recovery in our sector."

(IT)