Median price at August 2008: £174,518

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 Morayshire price guide

The complete Ross-shire price guide

The rule of thumb in the Highlands is that in times of uncertainty, prices don’t decline particularly but houses suddenly take a long time to sell. And, in a world changed from the one in which our experts forecast single-figure capital growth last year, that is pretty much what we have seen this year.

Demand for starter flats and ex-council family homes remains buoyant throughout this part of the Highlands. It has been compromised, though, by overcautious lending criteria in a part of the world where youngsters definitely struggle to raise big deposits.

Of the two counties, Ross remains the poor relation as a predominately parochial market. Indeed, its localised focus is reflected in the agents’ current prices and predictions.

Last time, Re/Max’s Andrew Reid said that stamp duty, interest rate rises and rising household costs were all hitting home in a region where real local earnings are typically far less than the Highland region’s average wage of just over £25,000.

As in Lanarkshire, Ayrshire and the central belt, the Highland counties have experienced an influx of buy-to-let investors, and competition from them means affordability is an issue for first-time buyers. The challenge facing Highland planning authorities is to promote policies that will allow builders, housing associations and local councils to work together to provide enough affordable housing to meet local demand.

Former Knight Frank new-build expert turned Highland developer Simon Barr says that while local finances constrain prices to an obvious degree, the limited ambitions of local builders ensure that they have only themselves to blame. “The £700,000-plus market is still going strong,” he says. “If you can offer a unique home on a unique site, people will find the money. Our market, in every sector, is all about an identity now: the boom has given everyone an education on what is quality. They have strong opinions and they don’t want anything they consider bog standard, regardless of what they have to spend.

“Those with most to fear in the current market are the mass market builders who are not offering anything different: their homes are produced to a formula that would be no different in Basingstoke or Blair Atholl.”

In summary then, as elsewhere conditions have slowed and currently favour buyers who can strike a hard bargain if they can make a clean offer. If you are selling, sell before committing to buy, and if you have to except a lesser offer, remember you can redress the balance as a buyer trading up.

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