Edinburgh experiences property price falls

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by Kay Murchie

House prices in Edinburgh have fallen by 5.6% in the last quarter according to the latest figures in the Lloyds TSB Scotland House Price Monitor.

Edinburgh is the only part of Scotland to have seen the prices of property dip over the period. However, the city has experienced a strong year and prices are still 18% higher now a year ago.

A mixture of the tightening of lending criteria from mortgage lenders and higher interest rates and problems at Northern Rock has resulted in a slowdown in the market.

However, in spite of these concerns, Edinburgh is still the most expensive place to purchase a property in Scotland with a house selling for just over £220,000.

It is believed by experts that since Edinburgh and Glasgow were the first parts of Scotland to experience the house price boom, they will be the first to feel it grind to a halt.

However, property prices continue to soar in Aberdeen, the city has noted a 34% rise in 12 months and a 4% increase in the last quarter. On average, a home in Aberdeen costs £207,315, much higher than the Scottish average of £168,559. Experts are anticipating that the increase in property prices will slow rather than decline.

Professor Donald MacRae of Lloyds TSB Scotland, said there is no proof of any collapse in Scottish property prices. Rather, the Scottish housing market continues to show robust annual increases in excess of inflation.

The Professor added that the slight decline in the quarter in Edinburgh prices may yet be replicated around Scotland when interest rate rises and increases in the cost of borrowing take full effect.

It is anticipated that the problems currently affecting Edinburgh will affect other areas of Scotland.

Dundee is catching up with the rest of the Scottish property market, achieving 17% in the last year.