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Aberdeen tops the table in Scotland

26th December 2006 Print
The annual Bank of Scotland house price survey of Scottish towns and cities has found that Aberdeen recorded the biggest percentage increase in house prices across the country in 2006 – an average rise of 27% to £171,767. It was also the only place in Scotland to feature in the top 20 best performing towns and cities across the UK.

Aberdeen was closely followed by Kilmarnock and Motherwell, which both saw a 25% increase in their average house price. Aberdeenshire was the Scottish region with most towns and cities ranked in the Scottish top 10 best performing areas. Along with Aberdeen, Inverurie and Ellon were both in the top ten and each saw average house prices rise by 21% in 2006. These two towns are now the third and fourth most expensive towns in Scotland, ranked behind Edinburgh and Helensburgh.

The historic town of Newry, on the north east coast of Ireland, has seen prices rocket 54% to £198,465, making it the top performing town in the UK for 2006. All of the top ten towns with the highest house price growth across the UK are in Northern Ireland, making it 'Northern Ireland's Year. 2005 was 'Scotland's Year' with nine of the top 20 towns experiencing the biggest house price rises north of the border. 2004 was the 'Year of the West' with 13 of the top 20 towns located in western Britain, particularly Wales.

Edinburgh is the most expensive place in Scotland to buy a home. The average price in the capital is £202,941 – up 12% from £180,834 in 2006, following a rise of 2% in 2005. The Capital is now the only place in Scotland with an average house price above £200,000. Helensburgh is the second most expensive town in Scotland with an average house of £190,005 – an increase of 15% in the past 12 months. There are four new entrants in this year's top 15 most expensive town list for Scotland– Ayr, Prestonpans, Elgin and Johnstone.

For the fourth year running, Lochgelly in Fife remains the least expensive town to buy a house in both Scotland and the UK. This is despite an 18% rise in prices in 2006 (average price climbing from £82,297 to £96,925). Lochgelly is now the only Scottish town with an average price below £100,000. In 2005 there were five towns in Scotland with an average price below £100,000. There has clearly been a sharp fall in the number of Scottish towns with an average price below £100,000 in the past few years. Almost two thirds of Scottish towns had an average price below £100,000 in 2003.

Scotland remains the least expensive place in Britain for homebuyers. Housing affordability in Scotland, while it has declined over the past year, is still the best in the UK. The house price to earnings ratio in Scotland is 4.2, the lowest of any part of the UK and compares with a UK average of 5.6.

The gap between prices in Scotland and the south of England has narrowed over the past four years. In quarter 1 2003 house prices in the South of England were as much as 2.6 times more expensive than in Scotland. At the end of 2005, the average property in the south of England (£214,849) cost 2.0 times as much as in Scotland (£106,943). During 2006, the gap has narrowed further and the average property in the South of England is now around 1.9 times more expensive than in Scotland. The average price in the south of England is now £231,959 compared to £122,506 in Scotland.

Southern towns continue to dominate the list of most expensive places in the UK. Gerrards Cross in Buckinghamshire is still the most expensive town in the UK with an average price of £724,594 following a 13% rise over the past year. Kensington & Chelsea (£695,874), Westminster (£530,262), Weybridge (£526,443) and Sevenoaks (£519,505) also have an average price above £500,000.

Tim Crawford, Group Economist at Bank of Scotland, said: "The north east of Scotland has seen firm house price growth in 2006, led by Aberdeen, which has benefited from a strong local economy, especially in the energy sector. More generally it has been another year of above average house price growth in Scotland. House price growth north of the border continues to outpace the UK average and this trend is expected to continue into 2007, although the pace of house price growth in Scotland is likely to cool slightly.

"There remains a real gap between the prices of the most and least expensive towns in Scotland. Edinburgh is the only city in Scotland with an average house price above £200,000, while Lochgelly is the only town with an average price beneath £100,000."