Scottish house prices forecast to rise by 10%

Knight Frank residential property sales in Scotland are already ahead of first quarter sales over the equivalent period last year, and every indication is that house prices in Scotland will still increase at 9 – 10% for the next 9 months ahead of a UK average forecast of 6%, according to agents Knight Frank.

John Coleman, Knight Frank’s Head of Residential Sales in Scotland comments: “We expect the housing market in Scotland, to remain in robust health through the rest of 2007 outperforming the rest of the UK which is expected to stand at 6% by the end of this year - down from an estimated 9% at the end of 2006”.

“Our figures to date have benefited from some notable sales already, but we still anticipate, particularly in the light of the decision to hold interest rates at 5.25 per cent last month, that the market will remain strong through the rest of the first half of 2007 with purchase activity standing at or above the 10 year average.

“In terms of the UK, the market will be led by growth in two areas - Scotland and Northern Ireland, and here we are predicting growth across the board at around 9 - 10%.

“Price growth in the UK will be constrained due to continuing affordability pressures. In most parts of the UK it is increasingly difficult for first time buyers to access the market, and price growth higher than 1 or 2 percentage points above wage inflation is unlikely.

“Should there be a further interest rate rise, we may yet see this anticipated growth cooling, although we would still expect the prime end of the market to remain buoyant.”