THE average selling price of houses in Scotland increased by nearly eight per cent in the last three months of 2017 — differing from the UK trend of decreasing prices.

The latest house price report from letting agency ESPC revealed the average selling price in east central Scotland between October and December 2017 increased by 7.3 per cent to £234,757 when compared with the same period last year.

In Edinburgh the average selling price is now £253,598 — up 9.5 per cent year-on-year.

However, the number of homes sold in east central Scotland in this three month period decreased by 2.5 per cent annually.

This comes as the Royal Institution of Chartered Surveyors (Rics) said last month house price growth will likely come to a halt in 2018 across the UK generally, with price growth in some regions offsetting a weaker picture in London and South East England.

Rics believes the stamp duty cut for first-time buyers is unlikely to stimulate housing market activity much overall but it said affordability may improve slightly for the sector.

ESPC says the increase in selling prices in Scotland could be attributed to a 2.5 per cent decrease in the number of homes sold over the last three months, and a 3.1 per cent decrease in the number of homes being marketed for sale.

With a shortage of properties available, particularly in desirable hot-spots, multiple buyers are in competition with one another, thus driving up the prices. This is similarly reflected in the fact that 89 per cent of properties in east central Scotland are now marketed as ‘offers over’, the highest percentage seen in a number of years, and those properties are achieving on average 9.3 per cent over the asking price, up from 7.1 per cent last year.

The number of new homes brought to market between October and December 2017 increased by 3.1 per cent annually.

The median selling time when compared to the same three-month period a year ago is down from 25 days to 20 days.

Some of the most desirable areas and types of property in Edinburgh that have shown the large increases over the last year include two bedroom flats in Morningside and Merchiston, up 17.3 per cent year-on-year, and two bedroom flats in Trinity, up 25.6 per cent year-on-year. While the time to sell is currently down to 18 days in Edinburgh, the types of property selling the quickest, at 14 days, are one bedroom flats in Gorgie and Dalry, and two bedroom flats in Portobello and Joppa.

While Edinburgh city centre flats are selling well, three bedroom houses in popular family areas like Blackhall, Silverknowes and Balerno and Currie have stabilised over the last three months, with slight decreases compared with the sharp increases in selling price earlier in the year.

Properties in Dunfermline have also increased by 1.7 per cent over the last three months and with an average selling price of £160,022, they are significantly more affordable than properties in Edinburgh or East Lothian.

ESPC’s business analyst, Maria Botha-Lopez said: “Throughout 2017 we have seen faster selling times, an increase in the percentage of properties being marketed as ‘offers over’ and an increase in average selling prices, particularly for two bedroom flats in the most desirable areas of Edinburgh.

“This is indicative of the trend we have seen of a shortage of properties and increased demand, which drive up the average selling prices.”