Highlands outstrip rest of Scotland with 221% rise in house prices

The average price of a house in the north of Scotland has more than trebled, from 53,991 in 1997 to 173,081 last year.

The region is performing better than second-place Edinburgh, where house prices have increased by 201 per cent, from 75,664 to 228,05, in the same period.

According to the Bank of Scotland's annual county house-price survey of the UK, East Renfrewshire is Scotland's most expensive region, with an average house price of 229,950. A decade ago, the figure was 80,037.

Experts said the flourishing Highland economy and the desire for better quality of life were drawing people north and fuelling the house-price boom.

Martin Ellis, chief economist at the Bank of Scotland, said: "This is a clear indication of the attractive nature of living in the Highlands.

"Generally speaking, it has a higher quality of life with lower crime and better air quality than we see in the cities and of course more rural areas. It is also excellent news for the Highland economy, which is clearly going from strength to strength."

But he added: "While this is good news for home-owners, it could cause some concern for first-time buyers, those on lower salaries and key workers such as teachers, nurses and police officers, who are struggling to get on to the housing ladder."

In third place in the table, Midlothian saw a rise of 188 per cent, with house prices rising from 64,242 to 185,195.

At the other end of the scale, houses in the Western Isles are the most affordable, with an average price of 124,067.

And eight of the ten regions in the UK which recorded the lowest average house-price gains over the past ten years are in Scotland.

Jamie Macnab, head of country homes at Savills, said: "These figures are not unexpected. It's been a notable feature how much more wealth there is in the Highlands.

"We've been getting very good prices for houses there from Highland buyers. Previously, it tended to be those from outside the area who were buying.

"This may be because the local economy has strengthened and people are making more money. It could also be linked to Inverness becoming a city."

However, James Jopling, head of campaigns at Shelter Scotland, said the figures were a stark reminder that a shortage of affordable housing was one of the most critical problems facing the Highlands.

He added: "The Scottish Government recently announced its support for a scheme to stop the closure of rural schools, but this will be meaningless if there are not enough affordable homes for families and young people."

Douglas McAdam, chief executive of the Scottish Rural Property and Business Association, added: "For a healthy rural economy, and to unlock the potential for business development, there is a need for available housing stock at realistic prices."

Overall, County Armagh in Northern Ireland is the best-performing UK area, with 331 per cent growth.

One in five first-time buyers is now aged over 35, with price hikes pushing home ownership out of the reach of many young people, according to property website Rightmove.co.uk.