Median price at August 2008: £174,518 (Highland)

General increase since Sept 2007: 12%

Projected increase to Sept 2009: 0-2%

Five-year increase: 101% (£86,648)

Ten-year increase: 209% (£56,390)

The complete Orkney price guide

The complete Shetland price guide

Last year Andrew Bonner of Orkney agency Lows reported that the big news in his backyard was a rash of shared ownership and new-build developments in Kirkwall that were pointing the way for other regions to address the issue of first-time buyer affordability.

Despite the gathering clouds on the horizon of a council jobs freeze in the Shetland capital, the market has enjoyed another solid year, aided, Bonner says, by a dry, warm summer that has got people out and about and in the mood to trade houses.

Bonner believes that the chancellor’s annual stamp duty threshold concession is a very positive intervention. “In our market most houses will fall below the £175,000 ceiling,” he says, “and that saving, although it is small, should have a knock-on effect in terms of encouraging buyers.”

“This year,” he says, “it is hard to say what is doing particularly well, but activity has really picked up in the past few weeks. There are new schools being built in Kirkwall and Stromness and Shetland’s housing association is very active, particularly when it comes to providing affordable housing in rural areas. In Stromness and Kirkwall it is also doing good work instigating a combination of renting, ownership and part-ownership schemes that are helping youngsters get onto the ladder.”

The only dark cloud on the horizon appears to be a lack of relocation business — and that usually accounts for Shetland’s biggest sales. As in Skye and the Western Isles, this sector has suffered as a result of potential southern buyers experiencing difficulties in selling their existing primary residence on the UK mainland.

Shetland, meanwhile, has been the second most buoyant market in Scotland this year, according to the latest figures from the Registers of Scotland. The highest year-on-year increase, at 14.3%, was in West Dunbartonshire, where the average house price is now £119,120. Shetland follows closely behind with an increase of 12.7%. The average price of a house in the isles is now £103,705 (significantly less than HBOS’s £174,518 Highland median price).

However, as we have said before, the specifics of Shetland’s sales returns each year ensure that such figures cannot be taken at face value.

Robert Bell of estate agents Dowle, Smith & Rutherford says it is difficult to be unequivocal about annual prices as the local market remains small. “You can get quite different annual figures because the range and type of houses sold can be very different from year to year,” he says. “For example, last year we sold at least half a dozen large houses in Lerwick in the £250,000-£275,000 price range: in 2006 we had only one or two.”

As a result, we have scaled down the figures in Shetland to reflect a more representative picture. Nonetheless, it seems fair to say, that both literally and figuratively, the islands have sidestepped the chill summer forecasts of the summer just past for now.

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