Highland capital enjoys a house price bonanza

Average prices in the Highland capital rose from £68,141 in 2001 to £169,257 this year – an increase of 148 per cent.

The Bank of Scotland study says four of the cities recording the highest rises in the last ten years are in Scotland.

Aberdeen has seen average house prices go up by 116 per cent to £178,764, while prices in Dundee have increased by 106 per cent to £123,711 and Edinburgh by 93 per cent to £206,303.

The six Scottish cities have seen average prices more than double (up 102 per cent) since 2001, rising £80,170 in that time from £78,913 to £159,083, and equivalent to £154 a week.

Prices across the whole of Scotland have risen by 89 per cent and across all UK cities by 65 per cent.

Inverness is regarded as one of Europe’s fastest growing cities with a quarter of the Highland population living in or around the city.

It is ranked fifth out of 189 British cities for its quality of life, the highest of any Scottish city.

In the recent past it has experienced rapid economic growth. Between 1998 and 2008, Inverness and the rest of the Central Highlands showed the largest growth of average economic productivity per person in Scotland and the second greatest growth in the UK with an increase of 86 per cent.

Sarah Woodcock, manager of the Highland Solicitors’ Property Centre in Inverness, said the city has seen a “phenomenal” increase in prices in the last decade.

The centre’s own figures show an increase in prices of over 113 per cent in the last decade.

“Most of that centred on the quick turnover years of 2005-2007 when it just went crazy. Inverness has become quite a desirable place to live and there has been so much building going on in the last ten years,” she said.

“Like everywhere else local people want to get on the property ladder, but a lot of people have been retiring to Inverness and others have moved here from elsewhere because of the quality of life.”

She said developments including Inverness becoming a city after the millennium and the progress of the University of the Highlands and Islands which received full title this year have also been factors in making Inverness more attractive.

Ms Woodcock added: “Since the economic downturn its been slightly unstable, it’s not crashed like other places, but it’s keeps dipping and rising.

“That’s probably because it can take longer for the effects of what is going on elsewhere to hit the Highlands. We seem to be relatively insulated from it.”

According to the BoS report the most expensive city in the UK in terms of houses prices is Westminster, with Edinburgh the dearest in Scotland and Dundee the cheapest.

House prices in cities across Scotland are, on average, 12 per cent (£15,157) higher than the average for their county. Edinburgh has the largest premium in Scotland with houses trading at 41 per cent above its county average.

Cities are also bearing up better against the economic downturn with smaller property price falls.

Suren Thiru, housing economist at Bank of Scotland, said: “With the housing demand and supply imbalance that characterises the Scottish property market often more acute within our major urban conurbations, homes in cities across the country are typically trading at a marked premium over neighbouring areas.”

“City house prices are generally supported by demand from those looking to gain from the economic and lifestyle benefits often associated with residing in major urban areas, as well as by the pressures on supply that often typify such locations.”

Edinburgh’s average house price of £206,303 makes it the most expensive Scottish city with Dundee (£123,711) the least expensive.

But Edinburgh is still the 12th most costly UK city with Westminster at the top with an average house price of £570,964. Salford in Manchester is the least expensive city in the UK (£105,833).