The housing market in Scotland is growing stronger

On an annual basis prices have risen by 19.5%, and have now been rising steadily for 18 consecutive quarters, according to Lloyds TSB Scotland.

It said Scottish prices were continuing to show "substantial" increases compared to the rest of the UK.

Chief economist Professor Donald MacRae said "robust retail sales and high consumer confidence" were responsible.

The report recorded wide variations across the country, with Dundee recording the biggest gains.

House buyers will be further encouraged by the recent cut in interest rates while the demand for houses continues to exceed supply Prof MacRae Lloyds TSB

The city, which came late to the housing boom, showed a quarterly price increase of 20% and an annual increase of 26.7% - the highest in Scotland.

Average prices in the city were measured at �121,133.

In contrast, Aberdeen saw big increases earlier in the year but recorded a 3.1% fall for the summer quarter, although it has still seen an annual rise of 17.3%.

Average prices in the city were recorded at �129,058.

Average price by property type Detached bungalow - �198,101 Semi-detached house - �130,710 Flat - �102,325 Terraced house - �100,068 All types - �128,497

Like Aberdeen, Glasgow had significant increases in the early part of the year but prices fell by 2.6% over the summer quarter to �142,945.

The annual increase, however, is running at 22.9%.

Edinburgh was first into the house price boom, then saw a price standstill earlier this year but is now picking up again, said the bank.

The capital saw a quarterly increase of 6.2% and an annual increase of 12.5%.

Average house prices were found to be �167,357.

Low unemployment

By category, detached bungalows in Scotland now cost an average �198,101 while flats cost �102,325, semi-detached houses �130,710, and terraced houses �100,068, said the bank.

Prof MacRae said: "The Scottish housing market has become less uniform with different price behaviours evident across the country.

"Despite low growth, the economic environment for the Scottish housing market remains benign with the lowest claimant unemployment for 30 years, robust levels of retail sales and continuing high levels of consumer confidence all keeping the Scottish housing market firm."

He added: "House buyers will be further encouraged by the recent cut in interest rates while the demand for houses continues to exceed supply.

"However, house prices cannot continue rising indefinitely at a rate faster than the increase in earnings, although a slowdown in the rate of price increase seems unlikely this year."