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Average house prices in Scotland fell by 0.2% in August, the first fall in a year as over half the country saw declines, the latest index shows.

On an annual basis prices increased by 5.7%, taking the average house price to £164,210, the data from the LSL Property Services/Acadata index.

But it was the strongest August in seven years for house sales, despite a monthly dip ahead of the independence referendum.

The data also shows that new peak prices were achieved in East Lothian and Aberdeen City, while values drop in Edinburgh.

'The powerful spell of growth cast over the Scottish property market was broken in August, as house prices fell for first time in a year,' said Gordon Fowlis, regional managing director of Your Move.

'At a time when property values across the rest of the UK were continuing to grow, Scotland moved against the grain and average house prices dropped across more than half the country  including Edinburgh, Aberdeenshire, South Lanarkshire, East Dunbartonshire and Fife,' he explained.

He pointed out that it has been an unpredictable and momentous few months in Scotland's history. In August, uncertainty was still rife over the outcome of the independence referendum, and this hindered the pace of activity in the housing market.

Sales in August were 8% below the typical seasonal trend, as sellers shirked the market and buyers postponed purchase decisions until the dust settled. 'This trend appears more acute at the top tiers of the market, where there were bigger investments at stake, and there was an 11% drop in the number of homes sold across Scotland for over £1 million between July and August,' said Fowlis.

'But this didn't poison the longer term health of the market, and this was the strongest August for house sales since 2007. In the first eight months of the year, there have been 60,000 properties sold in Scotland, up 17% on the same period in 2013,' he added.

He explained that first time buyers have been the key unlocking this growth with sales to this group up by a quarter on last year. Flats are changing hands more furiously than any other property type on the market, as a wave of new buyers with more modest budgets clamber onto the housing ladder.

'Annual price growth is holding fast, and Scotland's average home is worth £9,000 more than a year ago. This 5.7% annual rise is hardier than the growth currently being witnessed in regions outside of the south east sphere of the UK, as Scotland continues to sail on course through the recovery,' Fowlis explained.

'More and more parts of the map are being swept up in the stream, and house prices in East Lothian and Aberdeen City reached new record highs in August, with values rising 9.3% and 10.1% respectively in the last year,' he said.

'In Aberdeen especially, new developments and investment in house building projects are nourishing supply of available stock on the market, and feeding the appetite of activity. But it was Renfrewshire which currently clinches the top spot for highest annual growth, with prices climbing 17% in the past 12 months,' he added.

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(source:propertywire)

(image:woodleywonderworks/FlickrCC)