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Rise in Scottish city home prices is the highest in UK

HOUSE prices in Scotland's cities have seen some of the biggest increases in the UK over the last decade – with Aberdeen and Inverness soaring ahead of the rest of the country.

PROPERTY BOOM: The Granite City saw house prices almost double in 10 years, the biggest rise in the UK. Inverness saw average prices up 81%. Picture: Paula Fisher
PROPERTY BOOM: The Granite City saw house prices almost double in 10 years, the biggest rise in the UK. Inverness saw average prices up 81%. Picture: Paula Fisher

Aberdeen saw prices grow by 94% between 2002 and 2012, while Inverness property values rose by 81%.

Figures from the Bank of Scotland show Dundee and Perth also feature in the UK top five – increasing by 73% and 70% respectively.

The bank claims the dominance of Scottish cities partly reflects the fact that the whole Scottish property market has outperformed the rest of the UK over the past decade.

A spokesman for estate agency Clyde Property said: "These are impressive figures which show Aberdeen is leading the way in emerging from recession.

"Undoubtedly some of this property price growth in the Granite City will have occurred before the financial crisis as the figures extend over 10 years.

"But they tune in with our own understanding that the property market continues its long and slow recovery as better mortgage products appear on the market and smaller deposits are required."

House prices in cities have outperformed the rest of the UK over the last 10 years, increasing by an average of 38% from £125,276 in 2002 to £173,322 in 2012. This exceeds the 29% rise for the UK as a whole.

The sharp rise in average price in Aberdeen – up from £92,759 in 2002 to £179,607 in 2012 – has been linked to the oil sector.

Julia Willett, of estate agent Strutt & Parker's Banchory office in Aberdeenshire, said: "The property market in Aberdeen and Aberdeenshire remains extremely buoyant, underpinned by the strength of the oil industry, high employment and the romantic, historical and royal associations of Royal Deeside. As the energy sector has grown in the last decade, the property market has grown alongside it.

"Recruitment drives are resulting in more people relocating while salary increases of up to 20% in some cases in the past year mean others are now considering upgrading – all of which is good news for the property market."

Kevin Maley, of the firm's Inverness office, added: "Inverness was the fastest-growing city in Western Europe in 2007 and has experienced extremely rapid economic growth in the last 10 to 15 years. Inverness and the Highlands are a magnet for progressive industries and innovative new business."

However, he warned much of the growth took place in the first half of the last decade and said the figures may not accurately reflect the present market.

The bank's figures also showed that while some cities have performed exceptionally, Edinburgh, Glasgow and Stirling have seen prices rise more slowly than the rest of Scotland.

Prices in the capital increased by 47% , property values in Glasgow rose by 45% and Stirling saw a 35% growth over the last 10 years.

Despite this, Clyde Property said the market in Stirling is currently performing well.

The firm's spokesman added: "One city also mentioned in the bank's figures was Stirling. We're finding from our branch there that property market is performing well and we expect this area of Scotland to continue to recover strongly.

"The property market was never going to bounce back quickly from the catastrophic impact of the banking crisis. But we remain of the view a steady recovery remains under way."

The report also shows city house prices have done relatively well since the start of the slump in 2008, falling by an average of 17% compared to a UK-wide decline of 23%.

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