Scotland property prices continue to increase

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by Kay Murchie

Asking prices are falling in many towns and cities in England and Wales but values in Scotland are continuing to increase with property inflation higher than anywhere apart from Northern Ireland and London.

According to the Halifax, house prices in Scotland were up 0.7% over the past 3 months, 14% higher than 12 months ago. However, the Nationwide puts the increase at 2.5% over the 3 months and 12% over the 12 months.

The Edinburgh Solicitors’ Property Centre (ESPC) believes house price inflation, in fact, increased in September, driving annual inflation to 13% from 10.6% in August.

The outlook is very different, however, in England and Wales. Following the problems at Northern Rock, 5 interest rate hikes and the credit squeeze, the desire for new homes seems to have dwindled.

According to estate agents, official data is behind what is currently happening by up to 3 months so the full effect of the slowdown has yet to work its way into the numbers.

Estate agents in England and Wales are blaming the launch of Home Information Packs (Hips) for the slowdown. The Scottish equivalent, the Property Information Pack, is not due until 2008.

Property prices in many English and Welsh towns and cities are dropping significantly. Apartments in Hampshire which sold for around £200,000 4 years ago are now being sold for £150,000.

However, Scotland remains strong for sellers, particularly Edinburgh. A spokesperson for the ESPC remarked that there were no indications that prices could be falling. Whether the introduction of Property Information Packs will cause a similar decline will be determined next year.

The spokesperson concluded that the Scottish market works differently and the packs themselves are different too.