© The Herald
Originally published: 22.05.2007

House prices went up by nearly 7% in the past quarter, according to figures yesterday.

The survey by Lloyds TSB Scotland conflicts with other studies, which have reported much lower inflation and even price falls in recent months.

But the bank warned that the price rise recorded by its findings "may well be the last surge before the much forecasted slowdown".

According to Lloyds TSB Scotland, Scotland's east coast cities saw "substantial" rises and average prices in Edinburgh have now passed the £220,000 mark.

They suggested the big eastern rises - 18.2% in Aberdeen, 15% in Edinburgh, and 7.4% in Dundee - may be due to a springtime rise in mortgage transactions, a rush to take advantage of low fixed-rate mortgages, and a low number of properties on the market.

In the three months to April, the average house price in Scotland rose by 6.8% to £154,344, an annual rise of 11.9%, said the Lloyds TSB house price monitor.

"Average prices have now risen steadily for 75 successive months," said the bank.

Professor Donald MacRae, the bank's chief economist, said: "Average prices are some three-quarters of the UK level and continue to be propelled by a combination of favourable economic background and demand for houses exceeding the supply.

"Recent rises in interest rates will have a slowing effect on these house price increases. This latest surge is expected to moderate and may be followed by a decrease in the next quarter."

The biggest annual rise, at 25%, was recorded in Aberdeen, and the north of Scotland excluding Aberdeen saw an annual rise of 15%.

Edinburgh saw an annual rise of 12%, Dundee 9% and Glasgow 7%.

Outside the main cities, annual rises of between 11% and 15% were reported, with the south-west - where there had been no fall in price in the past six years - showed the most price "stability".

Quarterly increases of 18.2% were recorded in Aberdeen, 15% in Edinburgh, 7.4% in Dundee and 5.2% in Glasgow.