The best prospects in Scotland

In its recent prediction that suggested the UK as a whole would experience zero house price growth, Nationwide said that Scotland property would fare better than the rest of the UK, with four per cent growth in 2008, a slowdown but certainly not a juddering halt.

The explanation for this projected better performance had three elements. Scotland was less prone to boom-and-bust housing cycles than other parts of the UK, the house price-to-earnings ratio was more favourable to buyers and some areas, notably Aberdeen property, would continue to benefit from high oil prices.

For investors and housebuyers alike, however, decisions about buying depend on issues such as location and transport links as well as price. For those concerned with the prospects for prices to rise, it is notable that significant regional variations exist within Scotland.

Outside the major cities, for instance, seaside towns in Scotland have seen the top nine increases in price over the past three years, Halifax stated in August. Of course, Aberdeen is also on the coast, offering a sandy beach in summer and North Sea storms in winter, but the prosperity of the Granite City and its hinterland has been a clear example of the impact of oil prices. Lloyds TSB figures earlier this month showed a 34 per cent house price rise in the last year.

At the same time, certain areas have shown very different trends. Edinburgh rose 18 per cent over the last year, but saw a 5.6 per cent decline. Dundee was up 17 per cent over the year, while Glasgow trailed in behind on just six per cent. Meanwhile, outside the major cities the north of Scotland saw a 22 per cent rise on the back of a 9.6 per cent increase in the last quarter.

This suggests that a possible emerging trend is for prices to improve the most in the north, while the central belt sees decline. Further evidence of this was reported by Scotland on Sunday this past weekend. The paper quoted figures from Housepricereports.com - a website using official statistics to compile its housing data - that the highest increase in price this last year had been another northern town, Fraserburgh in Aberdeenshire at 69 per cent. In contrast to this, however, Bearsden, a leafy suburb on the edge of Glasgow, saw a two per cent fall through 2007.

The report added that other places in central and southern Scotland, such as Bearsden's neighbour Milngavie, Troon, Lanark and Gourock also saw either small declines or prices standing still.

Housepricereports.com director Dan Cookson told the paper such things were normal in a market experiencing a little cooling, saying: "Bearsden is an area that has enjoyed tremendous growth for many years and this may just be a steadying in the market." He added that "Scotland as a whole has still enjoyed a very healthy year but some negative growth figures are starting to appear as they always do in a cooling market", although this cooling still represented five per cent growth next year.

In Glasgow, however, there may be longer-term change, which may attract investors, due to the potential catalyst of the 2014 Commonwealth Games, which the city was recently awarded. Just like 2002 hosts Manchester and London with the Olympics, the city has put the regeneration of its east side high on the list of priorities. The athletes' village will be focused on the Clyde Gateway in Dalmarnock area of the east end, with the facility to be turned into housing afterwards.

Whether this can act as a successful catalyst for Glasgow will depend on a variety of factors, such as the strength of the economy, a joined-up plan and good transport, with the latter a hot topic after Strathclyde Passenger Transport scaled back proposals to expand the Subway. But while Edinburgh will always have a certain capital appeal and Aberdeen is the place to invest for those expecting large short-term price rises, Glasgow's big project may help it catch up in the longer run.

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