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Scottish house prices rise (slightly) as UK crashes

by Gordon Thomson© Evening Times
Originally published: 08.04.2008

More evidence has emerged that Scotland is bucking the trend on house prices as the rest of the UK suffers a property slump.

The rest of Britain has this year seen sale prices dip to their biggest monthly fall since the property price crash 16 years ago but in Scotland they have gone up by 0.2% since January.

Property prices plummeted by 2.5% across the UK last month with analysts warning of a "modest fall" for the rest of the year.

Britain's biggest mortgage lender, Halifax, said the drop was the largest since September 1992, and that house prices are now just 1.1% higher than they were a year ago, the slowest rate of annual growth for 12 years.

Chief economist Martin Ellis said the average UK house price was now £191,556.

Since the turn of the year property prices in the West Midlands have slumped by 5%, in Wales by 4.7% and Northern Ireland by 1.5%.

Scotland, however, continues to defy the national trend with the rise of 0.2%. The biggest rises last year were in Scotland, at 5.3%, and Northern Ireland with 3.5% Mr Ellis said this year's figures had to be seen in the context of price gains of 51% during the past five years and rises of 171% during the past 10 years.

He said: "Sound economic fundamentals are supporting prices. A strong labour market, low interest rates and a shortage of new houses underpin housing valuations.

"Our research shows the labour market is the key driver of the housing market. Employment is at a record high and unemployment is falling."