According to the Bank of Scotland's Quarterly Scottish House Price Index, the annual rate of HPI in Scotland is now 12.5 per cent, above the UK average of 9.9 per cent. Prices in Scotland rose by 3.0 per cent in Q4 2006, below the UK quarterly rise of 4.2%. This means, however, house prices in Scotland have almost doubled over the past five years, rising by 97 per cent.
The average price of a house in Scotland is currently £126,639. This is 32 per cent less than the UK average of £186,954. Although, Greater London prices are now 2.3 times higher than those in Scotland, compared with 3 times in Q4 2002.
Tim Crawford, group economist for Bank of Scotland, commented: "The housing market in Scotland continued to grow at a faster rate that the UK average for the fourth consecutive year in 2006. Despite this Scotland still remains the most affordable part of the UK to buy a house with an average house price nearly one third less than the UK average.
"In 2006 Scottish house prices rose by 12.5 per cent, above average growth but down slightly from growth rates seen in the previous three years. We expect house prices in Scotland to increase by 7 per cent in 2007, outperforming the UK average (4 per cent). Forecast Scottish house price growth rate is slightly above the long-term average of 6 per cent per annum since 1983 but would be the smallest rise since 2001.
"Aberdeen has seen the highest house price rises over the last year, 27 per cent growth to £171,767, benefiting from a strong local economy, especially in the energy sector. Looking at house price changes over the past decade, Musselburgh has seen the strongest percentage rise at 201 per cent, with average house prices climbing from £57,433 in 1996 to £172,991 now. The town has seen interest from commuters to nearby Edinburgh who have been attracted by its slightly lower prices.
"Edinburgh is still the most expensive place to buy a house in Edinburgh, and is the only town or city in Scotland with an average house price above £200,000. House prices in Glasgow are up 7 per cent to £148,848, while Dundee has seen prices climb 21 per cent over the last 12 months to £136,566. Inverness house prices are up just 1 per cent over the year to £154,325.
"Lochgelly (£96,925) is the only town surveyed in both Scotland and the UK to have an average house price below £100,000. In 2006 42 out of 47 towns (89 per cent) were unaffordable for a typical first-time buyer in Scotland.
Over the last ten years flats and maisonette properties in Scotland have seen the strongest growth, increasing by 166 per cent from £49,026 in Q4 1996 to £145,567 in Q4 2006.
