HOUSE prices in Scotland bounced back strongly in the second quarter, although the market north of the Border remains relatively subdued in a UK context, writes Ian McConnell.
The Halifax Scotland House Price Index, relaunched today with various economic forecasts in the wake of the Scottish Parliament's opening, reveals that house prices jumped 3.2% during the latest three months. They had declined in each of the two preceding quarters.
Annual house price inflation in Scotland, at 2.5%, is lower than in most other parts of the UK. It is way adrift of the 12% rate being seen in Greater London and even the 6.6% recorded for the UK as a whole.
Halifax is forecasting house prices in Scotland will rise by 2% this year. It is predicting an increase of 6% UK-wide.
Although the Scottish market as a whole is showing no signs of overheating, the building society-turned-bank highlighted the fact that there were locations in Glasgow and Edinburgh ''where the intense competition to buy a property is generating prices substantially beyond the market valuation''.
Halifax said the average price of a property in Scotland was now #61,731. The UK-wide average is #76,877.
The bank is forecasting Scotland's gross domestic product will grow by only 0.2%, in real terms, this year. It predicts GDP growth of 0.7% for the UK as a whole.
Halifax economist Martin Ellis, explaining why it had taken this view, pointed to Scotland's greater reliance on manufacturing and its under-performance of the UK as a whole in the last few years.
In its economic commentary, Halifax said that, in spite of its growing importance as a call centre location, Scotland's overall success in attracting service sector jobs had been ''disappointing''.
But it believed the establishment of the Scottish Parliament ''should provide a boost to economic growth (in) the country''.
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