House prices in Scotland are on a downward spiral, according to the latest economic report issued by the National Association of Estate Agents (NAEA).
The report revealed that the gap in property prices between much of Scotland and the UK is widening, with estate agents and surveyors reporting sluggish sales activity north of the border.
According to economist Dr Andrew McLaughlin, the Scottish economy is lagging behind the rest of the UK, with the exception of Edinburgh’s financial services sector. House price inflation across Scotland has remained between 0% and 3% over the past four years, whereas prices in parts of the UK have grown by nearly 10%.
Hugh Dunsmore-Hardy, chief executive of the NAEA, said the results were anticipated. ‘Against the economic backdrop, it is no surprise to find the Scottish housing market is treading water. In line with the UK market, the rates of property price rises are falling this year and for many areas in Scotland that is likely to mean no increase in house prices or rises of just 1% to 2% over the coming year, compared to nearer 5% across the UK,’ he said.
Forecasts for the rest of the UK included a 4% fall in overall housing transactions compared with 2000. House prices are expected to be up, on average, by 5% by the end of 2001 compared with an 8% rise last year.