House prices are rising faster in Scotland than in England, according to the Bank of Scotland. The latest Quarterly Scottish House Price Index shows house price inflation north of the border now stands at 14.5%, almost twice the UK average of 8.0%. ?Scotland continues to deliver house price growth above the UK average,? said Tim Crawford, Group Economist for Bank of Scotland, ?Only Northern Ireland has seen average prices climb faster over the last 12 months.?
Prices in Scotland rose by 0.7% over the last four months and have increased 91% in four years, the report shows. However, the average price of a house in Scotland is still 32% less than the UK average of £179,425. ?Scotland remains the most affordable place in the UK to buy a home, however the gap between prices in Scotland and England has continually narrowed since September 2003?, said Mr Crawford. Greater London prices are just over two times higher than those in Scotland, compared with almost three times in the third quarter of 2002.
Edinburgh has regained its crown as the most expensive place to buy a house in Scotland, with 9% increases over the past year. Average house prices in the Scottish capital now stand at £193,815, overtaking Dalkeith at £188,086.
Large increases were also recorded in Kilmarnock (35%), Oban (32%) and Dalkeith (28%). Lochgelly (93,529) is the only town surveyed in both Scotland and the UK to have an average house price below £100,000.
The Bank of Scotland forecasts a healthy yet cooler market over the remainder of the year. ?Sound fundamentals, underpinned by a strong economy and high levels of employment, will continue to support a healthy housing market over the coming months,? commented Mr Crawford. ?Higher mortgage rates and utility bills will nonetheless put pressure on householders’ finances, curbing housing demand. As a result, annual house price inflation is expected to moderate over the remainder of the year?.
But the Bank believes the Scottish housing market will continue to trump England?s. ?We’re forecasting that over the whole of 2006 Scottish house prices will rise by 10%, double the UK average of 5%? Mr Crawford added.