House prices in Capital on the increase

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HOME-owners were given some New Year cheer today with the news that house prices in the Capital are on the rise.

Edinburgh features in the top 20 of UK towns and cities which have witnessed the biggest rise in property prices over the past year, with the city posting a four per cent increase.

The latest figures, which have been published by the Bank of Scotland, show Falkirk has seen the biggest rise in house prices in Scotland and second biggest in the UK, having seen a 12 per cent hike.

But the average Scottish house price has fallen by three per cent, down to £140,005 from £144,280 in 2010.

Leslie Deans, of Leslie Deans & Co estate agents, said the rise in Edinburgh to an average of £204,958 was largely to do with the “fabulous” city itself and said he was viewing the coming year with “cautious optimism” in terms of property prices.

He said: “We are all lucky enough to live and work in a fabulous city. Edinburgh has consistently come high up in quality of life surveys and this is another reflection of that. Even though the country as a whole is having economic difficulties, Edinburgh has proven to be really quite resilient.

“We have seen a number of good quality family homes sold this year for in excess of the market value and I would expect that will continue in 2012.

“I am approaching 2012 with a cautious optimism. I don’t think that anywhere is going to see high prices next year but I don’t expect Edinburgh to decline.”

However Mr Deans said the first-time buyer market was still experiencing problems and would continue to do so.

He said: “We have seen difficulties at the starter end of the market. For prices here to increase, the government is going to have to put more pressure on the banks to modify their lending criteria.

“First-time buyers are being asked to put down massive deposits of between £20,000 and £30,000, which is impossible for most of them.

“Until we see a change in that lending criteria, then the first-time buyers’ market will not be able to improve.”

While Falkirk and Inverness made it into the UK top ten for the highest price hikes, Dunfermline and Ayr fell into the bottom ten, with prices dropping by 15 per cent and 13 per cent respectively.

Nitesh Patel, housing economist at Bank of Scotland, said: “There have been significant differences in performance in towns across Scotland in 2011.

“Four Scottish towns feature in the UK top 20, led by Falkirk.

“The ease of commuting to both Edinburgh and Glasgow, combined with the town’s relatively low average property prices, has led to upward pressure on prices in Falkirk.

“At the other end of the spectrum, difficult economic conditions and considerable pressure on household finances have resulted in house price falls in towns such as Dunfermline and Ayr.”