HOUSE prices in Scotland grew at their fastest rate in six years in the first quarter of this year – rocketing by 7.6 per cent.
The rise was the strongest pace of growth since the end of 2007, according to the Nationwide house price survey, although just below the UK average of 9.2 per cent.
Aberdeen city was deemed to be the most expensive region north of the Border – and the fastest-growing, with a 12 per cent increase on the previous year – with southern Scotland coming in as the least expensive. Aberdeen has seen a 107 per cent rise in property prices over the past decade, Nationwide said, taking the typical price paid to £246,532.
Prices in the areas surrounding Aberdeen have also more than doubled over the previous ten years, while the next biggest growth came in Dundee and Angus, where the cost of buying an average property rose by 67 per cent. Edinburgh property prices have grown by just over a quarter since 2003, while in Glasgow, they increased by 25 per cent.
Scotland-wide, the average house price was £138,386 in the first three months of this year. Prices rose by 2.3 per cent compared to the previous quarter.
South Lanarkshire was the weakest performing area over the past 12 months, recording a year-on-year increase of 2 per cent.
Mark Hordern, vice president of the Solicitors Property Centre Scotland, said the increase came after major drops in many regions as a result of the recession and subsequent sluggish property market. Despite positive growth in prices, Nationwide said only three regions – London, the outer Metropolitan area [of London] and the outer south-east, had surpassed the house price peaks of the months before the recession, the Nationwide report showed.
Mr Hordern said: “The combination of higher selling prices, faster sales and more sales all suggest a sustained recovery in the Scottish property market, led by stronger demand for flats and affordable family homes.
“But it’s important to put the recent increase in prices into context. In many areas, the recovery in prices over the last year merely reverses some sharp falls a year ago and house prices are still below levels seen at the peak of the market in 2008.”
Robert Gardner, Nationwide’s chief economist, added: “Although all regions saw annual house price growth in Q1, ten of the 13 regions have yet to surpass their pre-crisis peaks. Scotland saw a 7.6 per cent annual increase in prices, the strongest pace of growth since Q4 2007.”
In London, prices rose by 18 per cent to a level that is almost twice that of the UK average. UK property experts described the capital as a “country within a country”, warning that average buyers were being priced out.
Jonathan Samuels, chief executive of Dragonfly Property Finance, said: “The contrast between London and the rest of the UK grows starker by the day.
“For average prices in the capital to be more than twice that of the rest of the UK underlines the extent of the [north-south] divide.”