Scottish price growth still ahead of the field

According to the bank's latest house price monitor, prices in Scotland rose by 3.6 per cent in the three months to the end of October, with the annualised rate of growth now standing at 14.5 per cent.

As with UK figures, this statistic is increasingly characterised by a north-south divide, with prices increasing over the year by 34 per cent in Aberdeen and 22 per cent in the rest of the north.

Despite such growth, however, analysts remain cautious over future prospects.

"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," confirmed Lloyds TSB Scotland chief economist Donald MacRae.

"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," Mr MacRae warned.

But some financial market observers are now suggesting that rates could have fallen to as low as five per cent by the end of next year as the Bank of England looks to stave off a wider economic downturn.

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