SCOTLAND has recorded the biggest UK rise in house prices, with property values soaring by 11.6% in a year with Argyll and Bute revealed as the country's hotspot.

Analysis reveals that 19 of the 32 local authorities across the country reported price growth of over 10.0% with Argyll and Bute recording the biggest annual rise at 25.6%.

A nationwide study by chartered surveyors Walker Fraser Steele reveals that house prices in the local authority area - which is expected to see the highest hits in terms of energy price rises - has soared from £179,555 last June to £225,430.

It is the third month in succession that Argyll and Bute has recorded the highest annual change in prices.

In June, a five-bedroom detached home on the Isle of Bute having an asking price of £700,000, actually sold for £830,000.

Clackmannanshire, whose administrative centre is Alloa, has seen the second highest property price rises in the year, soaring by by 23.4% from £156,291 to £192,817.

It gone from being 26th on the list of the most expensive local authority areas to buy house to 21st - the biggest rise of the 32 studied.

The annual increase in the UK average house price slowed from 12.8% the previous month, to 7.8% in the year to June, the Office for National Statistics (ONS) said.

But Scotland has bucked the trend with house prices up by 11.6%, compared with a 7.3% rise in England, an 8.6% increase in Wales, and a 9.6% rise in Northern Ireland.

The typical house in Scotland is now worth £192,000 while in England it is £305,000, in Wales it is £213,000 and in Northern Ireland it is £169,000.

Among the English regions, the East recorded the fastest rise (up 9.7%) with the slowest in the North East (up 3.6%).

The Herald:

Walker Fraser Steele say that restricted supply of housing is the dominant factor for rising property prices across Scotland.

There were an estimated 8,320 house sales in June which would make it the third slowest of the last ten years, suggesting a cooling in demand during the cost of living crisis.

The Walker Fraser Steele study shows the other Scottish price rise hotspots are Orkney (19.2%), East Ayrshire (18.7%) and Dumfries and Galloway (16.6%).

The biggest loser in house prices was the Inverclyde local authority area, the only area in Scotland where house prices fell over the year - by 1.1%. It is the cheapest area in Scotland to buy a typical house, at £128,735.

Some 18 of the 32 local authority areas in Scotland experienced rising prices in the month, three fewer than in May.

The biggest winner was Perth and Kinross where average prices rose by 7.4% to £259,189.

That was helped by the sale of a four-bedroom local architect designed detached property near to the Bridge of Cully, which sold for its asking price of £1.3 million.

The priciest local authority area to live remains the City of Edinburgh where the average home price costs £336,252 - a leap of 8.1% in a year, but a dip of 1.3% over the month.

For the year to date there have been 453 sales in excess of £750,000 in Scotland, with over half half (228) in Edinburgh, driving the underlying rise in average house prices.

Scott Jack, regional development director at Walker Fraser Steele, said: “Across much of Scotland there is a continued lack of supply, and strong demand is fuelling individual sale prices.

The Herald:

We continue to see a desire to live in properties with plenty of space, and along with the increased ability to work remotely, areas of natural beauty such as Argyll and Bute have benefitted from an increase in interest from purchasers looking to relocate and enjoy a more rural lifestyle.

"Both Edinburgh and Glasgow are highly regarded internationally as some of the best cities in the world, and paired with access to beautiful countryside and beaches, perhaps this is why Scotland has recorded the biggest UK rise in house prices for the year to June.”

But there are warnings that house prices could take a hit in the future due to the cost of living crisis.

Sam North, personal finance expert at eToro said there will be a lag effect before Bank of England interest rate rises has an effect on the housing market.

Base rates went from 1.25% to 1.75% in a bid to curb soaring prices soaring prices with inflation predicted to peak at more than 13 per cent as energy prices soar. In November the base rate was at 0.1%.

The recent hike was the biggest single rise since 1995 and means interest rates are now at the highest level since January 2009.

"We are now many months into a cost of living crisis and as we head into autumn, millions of homeowners will be remortgaging onto higher rate deals, grappling with energy bills which have more than doubled and facing down eye-watering price increases on petrol and other essentials," said Mr North.

"This will undoubtedly have a severe negative knock-on effect on affordability and buying appetite, which will apply significant downward pressure on house prices. The housing market has defied expectations many times before, but we haven’t witnessed an affordability crunch like this in a generation.”