House prices in Scotland are expected to grow in the next year, avoiding a fall across the UK, a leading bank has predicted.
House prices in Scotland are expected to grow in the next year, avoiding a fall across the UK, a leading bank has predicted.
The Halifax house price index shows prices fell by almost 1% in the last year but Scotland recorded the biggest increase, a trend expected to continue.
Britain's biggest mortgage lender said it expected to see a further fall of around 5% in UK house prices in the coming year but regional variations will see some places continue with modest growth.
Scotland was expected to escape the decline while others areas south of the border would record significant drops.
The latest figures from Halifax showed Scotland outperforming the UK market.
North of the border, prices for the first three months of the year increased by 0.2%. But compared to the same quarter last year the rise was 5.3%. The best-performing region in England was East Anglia at 3.4%.
London house prices increased by 2% while Wales dropped 5.3% and West Midlands and the south-west also recorded falls.
Ross Wilson, spokesman for west of Scotland estate agents, Clyde Property, said: "This index supports what we have been saying. Despite the prophecies of doom and gloom the market is robust and there are plenty of houses to buy and sell. There is no need to panic. The idea of a price crash in Scotland is ridiculous. The Scottish market remains insulated from what people have been saying about the market south of the border."
The house price index for April showed prices fell by 1.3% across the UK compared to March, while year-on-year - thought to be the most accurate comparison - showed a drop of 0.9%.
The rapid rise in prices in recent years together with economic conditions squeezing people's spending power are blamed for the fall. It is anticipated interest rates will be cut further over the summer to combat economic slowdown.
Martin Ellis, Halifax Bank of Scotland's chief economist, said: "House prices fell by 1.3% in April. We expect a mid single digit percentage decline in UK house prices this year. There will be regional variations, however. Some areas are likely to record modest price rises while others are expected to see falls above the national average.
"Price falls should be viewed in the context of the substantial price rises over recent years.
"UK prices nearly doubled over the 10 years to August 2007. A growing economy, high employment levels, low interest rates and a shortage of new homes underpin housing valuations."
The number of house sales fell significantly, with a drop of 10% over the year, and the number of new buyers fell for the 16th successive month.
The number of mortgages approved for house purchases also fell. For the first quarter of 2008 the figure was 41% lower than the comparable period in 2007. Only 300,000 first-time buyers joined the property ladder in 2007, the lowest number since 1980.
