Capital house prices keep on rising through the roof

But house prices in the Capital are beginning to plateau, experts have warned, particularly for smaller properties.

The average price for July is up 7966 on the previous month, and represents an 11.1 per cent increase on the same time last year. However, the rise in the overall average is largely due to rising prices for larger homes.

The average price of a three-bedroom house is up 8 per cent on last year to 271,211, while the average for a one-bed flat rose just 0.6 per cent, to 129,060.

The Registers of Scotland said earlier this week that their figures showed the average price of a house in the capital between April and June was 213,915, up just 1 per cent on the previous quarter, and a 7.8 per cent annual rise. Figures cover all residential sales.

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The ESPC figures show that the number of homes sold in the Capital has risen for six straight months, although this rise is also plateauing.

Business analyst for ESPC, David Marshall, predicted that average prices would be likely to plateau across the board around the end of this year - and could even drop slightly.

He said he was surprised this had not already happened. He said: "I wouldn't have thought prices would have stayed so high this long into the year. We had expected that the price over the course of the year would remain pretty much unchanged.

"Possibly not in August, but certainly by the end of the year I think we should start to see prices easing off. I would have thought that by December this year and January/February of next they would be back at the level that we saw at the beginning of this year. We expect it to be a fairly short-term spike."

Steven Currie, director of lettings and sales agent Murray and Currie, said he was "amazed" to see figures that showed prices still rising, given that demand for rental properties was so high.

He said: "I feel that it's painting a picture that's not quite reflected in reality. The number of lettings that we're doing right now is going through the roof, because people can't afford the deposit for flats, they can't deliver a 25 per cent deposit and so they don't have any confidence in the market."

He warned that there was a danger that prices would not only plateau, but could sink again.

I do think a double dip is a real danger," he said. "I think there was a window of opportunity to sell your house before the election, but people have just frozen their decision making on whether to buy, because the government has done this emergency budget and they are drip-feeding bad news, we just don't know what's next.

"Let's not hold back, let's deliver the bad news and get it all through the system."