Median price at August 2008: £185,255

General increase since Sept 2007: 17%

Projected increase to Sept 2009: 0-2%

Five-year increase: 97% (£94,225)

Ten-year increase: 249% (£53,188)

The complete Inverness price guide

Inverness rode the crest of a wave in 2004 as one-bed flat values soared from £45,000 to £70,000. Four years on, the fast-growing city has returned to the sleepy conditions that previously defined this local market.

In 2006, there were already signs of an impending slowdown. A glut of unsold homes around the £200,000-£250,000 mark proved this. Two years on, the middle market remains treacherously unpredictable for both buyers and sellers.

Last year, Roma McIntosh of R&R Urquhart said: “Different areas are returning markedly different prices, often with neither rhyme nor reason.”

This year she confirms that things are much more predictable. With a log jam of properties on the market as a result of unrealistic seller expectations, nothing is moving very quickly because most homes are holding their price.

McIntosh says: “There is a lot of stock unsold on the market. It is a similar picture to what we experienced five or six years ago. There are potentially some bargains in the offing. Sooner or later, oversupply will be reflected in price falls. There is also some evidence,thankfully very limited, of economic downsizing: owner-occupiers on fixed rate mortgages selling up rather than struggle to meet big monthly payments.”

McIntosh says her biggest hurdle is persuading sellers that their house may no longer be worth the premium price they hoped. It is similarly difficult to convey to those trading up in the same market that they could be better off accepting less for their home and striking a harder bargain further up the ladder.

From our point of view, Inverness still looks relatively stable and anybody who has purchased their home three years ago or longer should be in a decent position. However, our local experts confirm that negative equity is a real possibility for some Invernessians who have recently paid over the odds for new homes.

This assertion places us wildly at odds with the figures of lender HBOS. They claim a 17% price uplift in Inverness this year and a 249% growth in average prices in the past decade. While both HBOS’s ten- and five-year average price figures reflect a fast-growing and historically undervalued city market, we take issue with the bank’s annual growth figure. We suspect it has been derived from an unrepresentative or small sample of mortgage data. We see little current evidence of prices in Inverness bucking the national trend towards stagnation. We see more of the same next year.

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