Scotland's property hotspots are showing signs of cooling down

The latest house price monitor from Lloyds TSB Scotland showed prices in Glasgow had fallen, following a trend already seen in Edinburgh and Aberdeen.

Over the last three months, house prices in the city had fallen by almost 2.5%.

Edinburgh and Aberdeen prices have fallen for the second time in six months although property values are still rising outside the main cities.

It is traditionally thought that the first areas to experience price booms are usually the first to experience a fall, and that is now occurring in Glasgow.

Despite five interest rate rises since autumn of last year, consumer confidence remains high, fostered by low levels of unemployment and inflation Professor Donald MacRae Lloyds TSB Scotland

But house prices across the rest of the country continue to rise on 2003, according to the Lloyds TSB Scotland House Price Monitor.

On an annual basis, prices are up 20% but the boom is drawing to a close in the country's three main centres of population.

In Glasgow prices have fallen by 2.3% in the last three months, while both Aberdeen and Edinburgh recorded a quarterly fall of 1.6%.

Outside these city areas, prices have increased by between 18 and 25% and the average Scottish house price is �114,575.

On an annual basis, house prices in Scotland have risen 20.4% with reported annual growths of 20% in Glasgow, 15% in Edinburgh and 10% in Aberdeen despite the recent losses.

Slow down

Chief economist at Lloyds TSB Scotland Professor Donald MacRae said the quarterly figures indicated the property boom was slowing down.

He said: "Despite five interest rate rises since autumn of last year, consumer confidence remains high, fostered by low levels of unemployment and inflation.

"The Scottish house price boom is coming to an end with price increases moderating to give sustainable average prices in relation to earnings.

"Prospects for the remainder of the year reflect a generally benign economic environment with house prices rising at a rate more consistent with the increase in average earnings."