The Scottish property boom may be at an end, according to a survey by Lloyds TSB.

Its research shows that house prices in Scotland fell by 1.6 per cent in the three months to January, with only two cities recording an increase.

The property market has enjoyed seven years of boom north of the border, with some areas seeing prices jump 30 per cent in the past twelve months.

“This is the first quarterly fall in the all Scotland average house price for seven years, all cities and areas outside cities continue to show an annual underlying price increase,” said Professor Donald McRae, chief economist at Lloyds TSB Scotland. “The market is showing sensible adjustment after years of price gains above the rate of inflation.”

Prof. McRae said that continued demand would ensure Scottish house prices do not stagnate, but that he expected the market to plateau this year as real incomes begin to catch up.