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Scots house price rises

 © The Herald
Originally published: 07.07.2006

House price rises in Scotland have gone up at more than twice the rate of the UK average over the past three months, according to the Halifax-Bank of Scotland House Price Index.

Prices in the UK increased by 4.5% in the first half of 2006 with a 2.6% rise during the second quarter, with increases in all regions except Wales.

The biggest second quarter rises were in Scotland (5.7%), South West England (3.8%) and East Anglia (3.5%). However, prices nationally fell by 1.2% last month.

House sale activity appeared to have slowed in recent months, the bank said. The number of mortgage approvals to fund house purchases during March-May 2006 was down 4% compared with the preceding three months after adjusting for seasonal factors, it said.

Martin Ellis, chief economist at HBoS, said that despite the dip in prices in June, sound fundamentals, underpinned by a strengthening economy, high levels of employment and low interest rates would continue to support housing demand over the second half of 2006.

"The annual rate of house price inflation, however, is expected to ease, partly because corresponding figures last year were strong," he said.

"Pressure on householders' finances from utility bill and council tax rises, combined with speculation of higher interest rates, are also likely to constrain demand."