Median price at August 2008: £171,616

General increase since Sept 2007: 13%

Projected increase to Sept 2009: 0-5%

Five-year increase: 148% (£69,330)

Ten-year increase: 197% (£57,854)

The complete price guide: Banffshire

The complete price guide: Nairnshire

Market view: The central belt housing boom was late in reaching the remotest confines of the northeast. In 2002 when it hit, the results were superficially spectacular. Owners of one-bed flats may have seen their homes’ values swollen by 300% in the past five years but that headline figure has to be set in context.

That self-same exponential rise in flat prices will, of course, have started from a historically low point and homes that were available for £16,000 in 2002 are probably worth only around £60,000 now. A profit of £44,000 is great — but your £60,000 pad will still be priced well below an entry level figure of £100,000-plus in most central-belt, one-bed-flat markets.

Last year it was assumed that Nairnshire and Banffshire had plenty more growth to do on the back of their head start afforded to everywhere else but nobody had factored in the fall-out from the unexpected Northern Rock crisis early this year. According to John Dougan, of the surveyor J&E Shepherd, last year’s predicted 10% increase in the market did start to take place following September 2007. It was on course at the beginning of this year “only to be derailed in the spring due to worldwide financial events we are now all too aware of”.

One year on, valuations and sale prices appear to be broadly at mid-2007 levels, although, as everywhere else, there is increasing stock of unsold properties and significantly reduced market activity.

Dougan says: “This growing number of properties is partly due to sellers, understandably, wanting to sell before they buy so they can budget for their next purchase. These stop-start conditions have contributed to stagnation.”

One of the main factors firing previous growth, locally and worldwide, was easily attainable finance and this has been removed. Against a backdrop of significantly increasing essential household costs, the market picture is at best unclear and at worst very gloomy. It will remain so at least until the issue of mortgage borrowing is addressed. “We cautiously predict stable prices or a slight fall over the coming year of around 5%, although, this figure is a lot harder to predict with confidence than in previous years,” says Dougan.

“On a positive note, the reduced amount of building and low unemployment in the local oil economy will help stabilise prices, although only once the moving goal post of ‘an affordable level’ is established for buyers and sellers.”

This is by no means bad news. If there is a reduction in prices in this part of the north, there is no doubt that this will allow hard-pressed first-timers back into the market. If sellers have to accept a lower price than they expected for a quick sale, they should be able to negate this by driving a good deal on their next purchase.

Dougan says: “My advice to investors would be, as always, to buy with a healthier focus on getting a good income yield, rather than speculative short-term capital gain. That party is over, for a good while at least.”

The market in this part of the world is historically 18 months behind the house price cycle of central Scotland, so chances are Banffshire and district can expect a pretty soft landing — while local earning levels can support it.

In Nairnshire both location and price are keen drivers of price. Nairn enjoys an excellent reputation as a base for Highland golfing excursions and for holiday lets. There is also a huge demand for flats, from landlords and locals, and where there is an attractive view on offer, properties are breaking local records.

However, Nairn and district remains price-sensitive. It is increasingly a dormitory suburb for priced-out Inverness commuters and English relocators; local wages cannot keep pace with recent price hikes.

Last year local agents Donaldson and Henderson predicted prices would contract for homes above the £170,000 mark and this appears to have transpired this year — but across the board. Talk of a mid-market price crash appears to be premature, with agents saying after the correction last year that prices are likely to remain pretty static for the next 12 months as the region mirrors its historic localised market profile. The concern is that a lack of viewers, movers, buyers and sellers has contributed to a market where very little is happening.

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