In the three months to 31 July 2007, the quarterly price index for the average domestic property in Scotland rose by 1.7 per cent to give an average mix adjusted Scottish house price of £162,779. On an annual basis, Scottish house prices have risen by +13.2 per cent. Average prices have now risen steadily for 78 consecutive months.
The largest annual rise is recorded in Aberdeen at +32 per cent. The north of Scotland (excluding Aberdeen) also reported a strong annual rise of +21 per cent, suggesting the boom in Aberdeen city is reaching out into the surrounding area. Though Aberdeen city has shown a slight fall in the quarter, this results more from an extremely strong quarter in the previous three months than any marked slowdown in the current quarter.
Dundee has had a strong quarter which has seen the city catch up further on the rest of the Scottish housing market, gaining 16 per cent over the last 12 months. Edinburgh remains consistently strong with a 15 per cent rise in the last year. Of the main cities, only Glasgow is demonstrating clear signs of a slowdown with a quarterly fall in prices of -1.2 per cent and a relatively modest annual rise of 5 per cent.
Outside the main cities, annual rises of between +10 and +21 per cent are reported, though quarterly falls are reported in some areas providing indication of a gradual slowing in price rises. The South East excluding Edinburgh records a fall of -10 per cent.
Professor Donald MacRae, chief economist for Lloyds TSB Scotland, said: “We witnessed a significant surge in house prices in the previous quarter which goes some way to explaining the range of quarterly results in the current quarter. Although there is wide variation in price changes across Scotland, there is clear evidence that the Scottish house price boom is coming to an end. Recent interest rate rises and increases in the cost of borrowing are clearly having an effect.
“The rate of increase of house prices in Scotland has slowed significantly but a fall in house prices remains unlikely. The Scottish housing market may be down but it is certainly not out.”
