In its quarterly price index, it claimed house prices in Aberdeen, Edinburgh and Dundee have surged in the last quarter.
Such an unusual price spike could be attributed to the rise in mortgage transactions in Spring, coupled with the desire to take advantage of low fixed rate mortgages in a climate of rising interest rates. The low number of properties on the market may also have contributed.
In the three months to 30 April 2007, the quarterly price index for the average domestic property in Scotland rose by 6.8 per cent to give an average mix adjusted Scottish house price of £154,344. On an annual basis, Scottish house prices have risen by +11.9 per cent. Average prices have now risen steadily for 75 consecutive months.
The largest annual rise is recorded in Aberdeen at +25 per cent. The north of Scotland (excluding Aberdeen) also reported a strong annual rise of +15 per cent, suggesting the boom in Aberdeen city is reaching out into the surrounding area.
Edinburgh also records a robust annual rise of +12 per cent following a particularly strong quarter. With Dundee at +9 per cent and Glasgow at +7 per cent, even these rises show significant growth over the last 12 months.
Outside the main cities, annual rises of between +11 and +15 per cent are reported, with prices in the south-west demonstrating more stability than elsewhere in the country. The south-west (excluding Glasgow) is the most stable part of Scotland showing regular consistent rises with no fall in price in the last six years.
Professor Donald MacRae, chief economist for Lloyds TSB Scotland, said: “The rate of increase of house prices in Scotland has shown a significant surge in the latest quarter. Average prices are some three quarters of the UK level and continue to be propelled by a combination of favourable economic background and demand for houses exceeding the supply.
“Recent rises in interest rates will have a slowing effect on these house price increases. This latest surge is expected to moderate and may be followed by a decrease in the next quarter. This latest increase in Scottish prices may well be the last surge before the much forecasted slowdown.”
