Scottish house price inflation may have peaked

Posted: 15 Aug 2007 12:03:36 GMT

The Scottish house price boom is coming to an end, according to the latest figures.

The Scottish house price boom is coming to an end, according to the latest figures.

Lloyds TSB Scotland has published its latest House Price Monitor and it shows that prices continue to rise but inflation has "slowed significantly".

The quarterly price index looks at prices in the three months leading to the end of July 2007 and found that many regions saw strong price growth.

Aberdeen saw the largest increase, with prices growing by 32 per cent, while the rest of the north of Scotland saw an increase of 21 per cent.

Of the main cities, Glasgow performed worst, with prices falling by 1.2 per cent in the quarter and a modest annual increase of just five per cent.

"We witnessed a significant surge in house prices in the previous quarter which goes some way to explaining the range of quarterly results in the current quarter," said professor Donald MacRae, chief economist at Lloyds TSB Scotland.

"Although there is wide variation in price changes across Scotland, there is clear evidence that the Scottish house price boom is coming to an end. Recent interest rate rises and increases in the cost of borrowing are clearly having an effect.

"The rate of increase of house prices in Scotland has slowed significantly but a fall in house prices remains unlikely. The Scottish housing market may be down but it is certainly not out," he added.

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