by Lucinda Cameron© The Herald
Originally published: 16.11.2007

HOUSE prices in the north of Scotland have risen faster than anywhere else in the country in the past year, new figures revealed today.

Aberdeen is leading the market, with prices rocketing by 34per cent in the past 12 months, and 4per cent in the past quarter.

A home in the granite city now costs GBP207,315 on average, far above the Scottish average of GBP168,559.

However, in Edinburgh house prices have dipped 5.6per cent in the last three months, which could be a sign of things to come across the country.

Elsewhere in the north, excluding Aberdeen, prices have soared by 22per cent since October 2006, and 9.6per cent in the last quarter.

The gains put the north ahead of Scotland as a whole, which has seen average house prices rise by 14.5per cent in the last year and 3.6per cent in the last quarter.

But the increases have not been replicated in the south, where there are signs of a gradual slowdown, particularly in the major cities.

In Glasgow, price increases were the lowest in the country, rising just 6per cent in the last year, and 0.9per cent in the last quarter.

Edinburgh remains the most expensive place in Scotland to buy a home, with buyers paying GBP220,066 on average to secure a home.

But while prices rose by 18per cent in the past year, they fell by 5.6per cent in the last three months.

A spokesman for Lloyds TSB, which published the figures, said price changes in the capital could indicate what might happen elsewhere in the market.

He said: "We've seen indications of a slight drop in Edinburgh this quarter but that happens and the next quarter it could go up again due to the fluctuations of the market.

"We would not read that as an indication that things are about to slow down.

"But we would always expect Edinburgh and Glasgow to be the first to show any signs of falling because they were first in the market and in some respects the rest of the country is playing catch up."

In Dundee, prices rose by 17per cent in the last year, and 2.7per cent in the last quarter.

Other regions saw steady growth, with prices in southwest Scotland increasing by 10per cent in the last year and 5per cent in the last quarter.

South-east Scotland saw an increase of 13per cent in the past year and 3.7per cent in the last quarter.

Central, Fife, Perth and Tayside also saw a 13per cent increase and a 0.7per cent quarterly rise.

Professor Donald MacRae, chief economist, Lloyds TSB Scotland, said a gradual slowdown may take place in the Scottish housing market.

He said: "There is no evidence of any crash in Scottish house prices.

"Rather, the Scottish housing market continues to show robust annual increases in excess of inflation.

"However, the slight decline in the quarter in Edinburgh prices may yet be replicated around Scotland when interest rate rises and increases in the cost of borrowing take full effect.

"The increase in Scottish house prices needs to slow.

"However, this will happen as a gentle slowing in price as opposed to an abrupt fall."

Prices for flats, semidetached, terraced and detached properties have all risen by 14-16per cent in the past 12 months.

The figures were published by the Lloyds TSB Scotland House Price Monitor.