Scotland house price inflation reaches 14.5%: UK Property Shop News

Halifax Bank of Scotland has released its Scottish House Price Index for Second Quarter 2006.

* The annual rate of house price inflation in Scotland is now 14.5%, above the UK average of 9.4%. Prices in Scotland rose by 5.7% in Q2 2006. Over the past five years house prices in Scotland have risen by 91%.

* The average price of a house in Scotland is currently £121,558. This is 32% less than the UK average of £177,962.

* Lochgelly (36%), Dalkeith (35%) and Peterhead (32%) recorded the largest increase in house prices in Scotland and ranked first, third and fourth across the UK over the 12 months to June 2006.

* Dalkieth (£192,678) has overtaken Edinburgh (£190,703) as the most expensive town or city in Scotland - the first time the capital has not topped the Scottish house price list since 2001.

* Three Scottish towns have an average house price below £100,000 - Kelty (£92,140), Lochgelly (£93,731) and Greenock (£97,304).

* Greater London prices are now 2.2 times higher than those in Scotland, compared with almost 3 times in Q2 2002.

Tim Crawford, Group Economist for Bank of Scotland, comments: "The housing market in Scotland is the strongest in Britain with nearly 15% house price growth over the past year. However, current growth rates are well down on the 20% plus house price rises seen in 2004 and early 2005. The average house price in Scotland has now pushed through £120,000 for the first time, causing increasing affordability issues for first time buyers. However, on a relative basis Scotland is still well placed, being the most inexpensive part of the UK with the average Scottish house price more than 30% below the UK average. Sound fundamentals, underpinned by a strengthening economy, high employment levels and low interest rates, should continue to support the Scottish housing market in the second half of 2006."

Lochgelly (£93,731) has been the best performer in Scotland with a 36% increase in its average house price over the past year. While house prices have climbed sharply in the former mining town, it remains one of the most affordable places to live in the UK and is one of only three Scottish towns to have an average house price below £100,000 - Kelty (£92,140), and Greenock (£97,304) being the others. Kelty has replaced Lochgelly as the town with the most affordable housing in Scotland.

Dalkeith (35%) and Peterhead (32%) recorded the next largest increase in house prices in Scotland and ranked third and fourth across the UK for house price growth over the 12 months to June 2006. Dalkieth (£192,678) has overtaken Edinburgh (£190,703) as the most expensive town or city in Scotland, despite a rise of 8% in house prices in the capital.

Of the four major Scottish cities, Aberdeen saw the highest growth in house prices over the year, with an increase of 24% to £152,989. Strength in the local economy and in the energy market has provided a fillip for house price growth in the city. The next best performer was Dundee where the average price rose to £127,826, a rise of 18%. In Glasgow the average price is £142,252 (up 7%).

Despite seeing a modest 5% fall in average house prices over the last year, East Renfrewshire (£186,049) remains the most expensive local authority in Scotland. East Ayrshire has seen the strongest rise by a local authority, up 24% over the last 12 months to £114,120.