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House prices in Scotland rising at faster rate than most of UK

THE revival in the Scottish ­property market is picking up pace according to three upbeat new reports which show rising house prices in many regions and greater demand from buyers.

A study by leading property data firm LSL/Acadata Scotland branded 2013 the "year of recovery" and said the country experienced some of the fastest rates of growth in house prices in the UK, with the value of an average property increasing by 3.6%.

Separate figures from the Office of National Statistics (ONS) ­indicated a more modest price rise of 0.5% during 2013, but they also estimated a much higher average property price in Scotland than other recent reports.

Meanwhile, estate agents Strutt and Parker also reported a return towards better times, with many homes being sold for more than the value listed in the home report and closing dates being imposed on a rising number of sales.

According to LSL/Acadata's new house price index, average prices in Scotland rose more than £5000 over the year to hit £146,696 in December.

Experts said the return of the first-time buyer to the market - enticed by "an inviting cocktail" of low interest rates, easier lending conditions and competitively-priced mortgages - was the main force behind the relatively high level of sales.

Gordon Fowlis, regional ­managing director of Your Move, part of LSL, said: "The recovery of the Scottish housing market is bouncing ahead, with price rises moving past those seen in every other region in Great Britain aside from London and the south-east."

In the south-east of England and Greater London average prices rose over the year by 3.8% and more than 10% respectively.

The number of homes changing hands in Scotland in December reached a monthly level last seen more than five years ago.

There were 9050 property ­transactions in Scotland in the final month of the year - a 27% rise on December 2012 and the highest number of properties sold in a single month since July 2008.

On a regional basis, the highest movement in house prices over the year was in East Lothian, up more than 13%. It was followed by South Ayrshire, where average prices have increased by 8.7%.

In Glasgow prices rose by 3.2%, meaning the average property was worth £126,888 at the turn of the year, while a house in Edinburgh, Scotland's most expensive area, was valued at £213,492, a rise of 5.5% on December 2012.

Acadata chairman Dr Peter Williams said: "One of the main challenges for the housing market in 2014 is how to satisfy the demand for housing which is now evident.

"Most estate agents are reporting a lack of new sellers coming to the market, which will have the effect of pushing up prices as buyers compete for the reducing number of properties available."

The ONS figures drew on ­property market reports from across the UK, including those by Registers of Scotland and the Land Registry House Price Index.

According to their estimates, an average property is Scotland is worth £182,000, while the average UK house price reached £250,000 in December 2013.

Between 2012 and 2103, house prices grew by 5.7% in England, 4.8% in Wales, 0.5% in Scotland and 4.8% in Northern Ireland.

Speaking at Strutt and Parker's annual House Price Briefing, Blair Stewart, Head of the Edinburgh Residential Department, said that while the market is still below that of its peak in 2007, it is close to the prices paid in 2006. He added: "There is also a strong demand for prime new build and top-end refurbishment, with many of these being sold off."

He predicted between 3% and 5% growth in the £300,000 to £800,000 bracket and said the market for properties worth £1 million or more was expected to remain static.

He added that September's ­independence referendum was expected to cause a slowdown in sales as buyers adopt a "wait and see" attitude.

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