Lloyds TSB Scotland has warned that the surge in Scottish house prices in the last quarter could be followed by a slowdown.

The Lloyds TSB Scotland House Price Monitor study claims Scottish house prices have risen by an average of 11.9% in the last year.

Aberdeen recorded the largest average annual rise at 25%, and the figures for the North of Scotland suggest that Aberdeens boom may be having an effect on house prices in the surrounding area. The cities of Edinburgh, Dundee and Glasgow also showed annual increases of 12%, 9% and 7% respectively.

Professor Donald MacRae, chief economist at Lloyds TSB Scotland, said: “Recent rises in interest rates will have a slowing effect on these house price increases. This latest surge is expected to moderate and may be followed by a decrease in the next quarter. This latest increase in Scottish prices may well be the last surge before the much forecasted slowdown.”

The Lloyds TSB Scotland House Price Monitor claims to be the only house price comparison index to focus exclusively on Scotland.