A leading economist has warned that Scotland may not escape the housing market slump due to the credit crunch.

Although the values are not likely to fall far according to Professor David Bell, it is only a matter of time before the market slowdown ripples out from London.

Yesterday the Royal Institution of Chartered Surveyors revealed that 90% of it's members reported that house prices in Scotland were either rising or staying the same.


Professor David Bell, who is based at Stirling University, said he would be "very surprised" if Scottish house prices were still rising three months from now.

Professor Bell said: "I think we are looking for a period of between stability and mild decline. I suspect it will be towards the decline, but not something that's going to dramatically affect the value of people's houses that they have built up over the years.

"If there is a decline, it would not be a very marked decline. We might get a decline from June to July, but we are not looking at a substantial decline in value over, say, what the prices were a year ago."

Professor Bell believes that Scotland is not exempt from the credit crunch affecting the rest of the UK as potential homeowners will still have to borrow from the same banks offering the same deals.

(GK/JM)