Scottish housing market remains buoyant

House prices across Scotland continue to rise according to the latest Lloyds TSB Scotland House Price Monitor.

Prices in the north of the country are leading the field, while indications of a gradual slowdown can be found further south.

In the three months to 31 October 2007, the quarterly price index for the average domestic property in Scotland rose by 3.6 per cent to give an average mix adjusted Scottish house price of £168,559. On an annual basis, Scottish house prices have risen by 14.5 per cent.

Aberdeen and the north of Scotland maintain the lead they held in the previous quarter with Aberdeen recording an annual rise of 34 per cent and the north of Scotland (excluding Aberdeen) 22 per cent.

Dundee continues to catch up on the rest of the Scottish housing market, gaining 17 per cent over the last 12 months. Though Edinburgh records a fall in the quarter, the capital remains strong with a rise of 18 per cent in the year. Of the main cities, only Glasgow is demonstrating continuing signs of the expected slowdown with a quarterly rise in prices of 0.9 per cent and an annual rise of 6 per cent, which, though modest, is still significantly higher than the rate of inflation.

Average house prices in Edinburgh remain the highest in Scotland at £220,066, followed by Aberdeen with £207,315, Glasgow with £164,997 and Dundee with £156,770.

Outside the main cities, annual rises of between +10 and +22 per cent are reported.

Professor Donald MacRae, chief economist, Lloyds TSB Scotland, said: “There is no evidence of any crash in Scottish house prices. Rather, the Scottish housing market continues to show robust annual increases in excess of inflation. However, the slight decline in the quarter in Edinburgh prices may yet be replicated around Scotland when interest rate rises and increases in the cost of borrowing take full effect.

“The increase in Scottish house prices needs to slow. However, this will happen as a gentle slowing in price as opposed to an abrupt fall.”