HOUSE PRICES in Scotland rose by 6.8% between the first and second quarters of 2007, according to figures released by Registers of Scotland yesterday.

The average house now costs £149,316, up 14.3% on a year ago. House prices have risen 15% in the region that covers Dundee, Perth and Kinross, Stirling, Fife, Clackmannanshire and Falkirk, with the average cost up from £118,909 to £136,716.

Meanwhile, the Bank of Scotland’s latest Rural Housing Review shows homes in country areas are less affordable than their city counterparts. The average house price in the country is £177,007, 12% higher than the average urban price of £157,519.

Since 2002, rural prices have risen 112%, against 107% in towns. There are fewer first time buyers in rural areas—18% of the market, against 31% in cities. Only 22% of rural homes are social housing, against a 31% urban figure. Second homes account for 3.5% of rural housing, just 0.5% in cities.

“Rural areas face particularly tough conditions,” said Martin Ellis, the bank’s chief economist. “Higher average property prices and lower earnings mean housing is less affordable than in urban areas. Young people, in particular, are finding it tough to get a foot on the property ladder, compounded by lower social housing provision in rural areas.”