The year in figures

Scotland has been the success story of 2007. According to Halifax Bank of Scotland (HBOS), house prices have risen by 10 per cent this year, the highest in the country, and twice the UK average. To put this in context, however, over the past ten years Scottish house prices have risen by 138 per cent, less than anywhere else in the UK. Over the same period, prices in Northern Ireland rose by 311 per cent.

The Scottish prime (over £1 million) market has not performed as strongly as the mainstream market this year, with a rise of 8 per cent, but this is still the fourth highest in the UK, after Northern Ireland, London and the South East, according to Knight Frank.

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John Colman, Knight Frank, Edinburgh: “Top-end country houses have flourished. There aren't very many of them, and that makes them expensive. Commuter areas are very strong: Perthshire, Ayrshire, South Argyle, the Lothians and the Borders.”

Alasdair Seaton, D.M. Hall, Kinross and Dunfermline: “We had very strong growth in the first eight months of 2007, and the market is still decent at the lower end. Flats and ex-council are ticking over nicely. Country piles are also still selling well.”

Faisal Choudhry, Savills research, Glasgow: “The country-house market is booming. In the year to September, growth was 19 per cent, the best since 1989. Small new-build flats have also done well. In Glasgow, tenement flats for under £100,000 get snapped up quickly. That sort of price is hard to find in Edinburgh, but anything at the bottom sells immediately.”

...and what's not

John Colman, Knight Frank: “The core market of smaller family houses has seen a bit of a slowdown. Everything is taking longer to sell.”

Alasdair Seaton, D.M. Hall: “Anything over £300,000 is experiencing lengthening sales periods, particularly resales of modern houses.”

Faisal Choudhry, Savills: “Large new flats in city centres have been slow. Modern houses are also having a few problems.”

Forecast for 2008

Scotland will outperform the rest of the country with healthy market growth, moderated by an uncertain economic picture. HBOS expects Scottish prices to rise by 4 per cent, more than anywhere else in the country, against falls in the North and the Midlands and a flat average growth rate. Hometrack predicts 3 per cent growth next year for Scotland and Northern Ireland, compared with an average of 1.2 per cent nationwide, but expects Scotland to move ahead over the next three years with average growth of 3.9 per cent, the highest in the UK.

At the top end of the property market, Knight Frank predicts above-average growth of 5 per cent for Scotland, the same as for the South East and just behind Northern Ireland's 6 per cent. However, although 3.9 per cent future growth is predicted, Knight Frank expects this to be the lowest in the UK when taken as an average until 2012.

What will be the new trends?

John Colman, Knight Frank: “Houses which in any way aren't ideal will be harder to sell.Even first-time buyers will be choosy.”

Alasdair Seaton, D.M. Hall: “The banking industry needs to sort itself out or it will pull down the overheated market it created.”

Faisal Choudhry, Savills: “Prices will continue to increase overall, but not at the same rate we have seen. The worst that will happen is a price correction, except in the case of large new-build flats — they are the most vulnerable.”

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