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Luxury home sales in Scotland are on the rise as cash rich buyers re-enter the market. Many investors are also moving away from the over-inflated real estate prices in London and seek bargains elsewhere, re. in Scotland.

Real estate agents see this renewed surge of sales as a positive sign for the market. Jamie Macnab, director of country houses with Savills was overheard saying: “We’ve had a lot of interest in Scottish country houses lately from Europeans, especially as they realize they can get better value for their money because of the exchange rate.”

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Scotland’s million-pound home market continues to thrive in Edinburgh despite the worldwide economic slowdown. Recent housing market reports show that some 87 houses were sold in Edinburgh for £1m or more in the year 2008 up until October 2008. This is slightly less than back in 2007 when a total of 112 houses were sold but considering the current worldwide economy these figures are still sound.

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Kelvingrove park area of Glasgow [credits: Sherrivokey]

The new Lloyds TSB Scotland report showed that property prices have risen in the last quarter ending July 2008. In total they went up by 1.6 per cent, which brought the average house price to £172,185.

However, despite this increase in property worth, the actual number of house purchases has dropped 27 per cent since last year.

Chief economist at Lloyds TSB Scotland, Professor Donald MacRae said: “The price boom of the last five years may well have passed into history but so far the effect of its demise is to slow the number of transactions rather than cause a drop in prices.

The Scottish housing market is demonstrating its traditional resilience in the face of an economic downturn.”

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Visitors to the Hebridean Islands of Coll and Colonsay in the last couple of years will have noticed the impressive work being carried out in improving their airfields. They might have speculated that this work heralded greatly improved accessibility for holidaymakers, including folk interested in the second home potential of either of these islands, with the possibility of services from Glasgow along the lines of those already available to Tiree and Benbecula courtesy of Loganair.

In fact, the investment in improved airfields by Argyll and Bute Council (with grants from the European Union) was made to facilitate an air service from Oban to each island with the particular aim in view of enabling secondary school children to do their weekly commute to school on the mainland more easily. Furthermore, the council has yet to find a carrier to contract to fly the services it was envisaging; all in all the investment has turned out to be fairly controversial.

This story of frustration illustrates some of the main determining factors for the future development of the Scottish: their innate attractiveness, their economic and social fragility and the overriding importance of improved transport links.