Median price at August 2008: £166,690

General increase since Sept 2007: 3%

Projected increase to Sept 2009: 0-2%

Five-year increase: 79% (£93,149)

Ten-year increase: 136% (£70,908)

The complete Argyllshire price guide

Last year we reported that Argyll had become a two-tier market with relocators and lifestyle buyers creating the top-end market. Poorly paid locals are at the bottom end with affordability issues.

The past year has been stable, with the experience in Mull and Oban typical of the region’s activity.

In the popular holiday destinations, demand has remained stagnant in the mid-market as last year’s interest rate rises have taken hold. Flats and small bungalows remain the most sought-after properties, reflecting the trend for second homes. First-time buyers can rarely compete with those looking for a holiday bolthole.

However, the islands’ key agent, MacArthur Stewart, is not holding out hope for another bumper 12 months. Its caution is justified. With fears over the impact of interest rate rises and the stamp duty threshold stagnating the £250,000+ family home sector, valuers feared that demand for holiday homes will also wane.

What they have seen instead, according to Carol McDougall, of MacArthur Stewart, is a stand-off between buyers unprepared to reduce their expectations and sellers unable to meet them because of lenders’ stricter mortgage criteria. Flats that appeal to locals and incomers continue to sell well. The credit crunch is definitely biting, ensuring more mainstream holiday visitors are being more cautious than previously. However, the agent says: “More people are taking particulars than in recent months and there are more signs of holiday buyers returning to the market.”

Paul Nicoll, of DM MacKinnon Estates, confirms that Argyll’s markets for first- and second-time buyers remain buoyant, as does the top 5% of sales where prices are inevitably inflated by lack of supply.

There is no sign that those looking for a premium sea view have been affected at all by the credit crunch. Nicoll says: “The best quality buyers remain immune to wealth fluctuations. Further down the scale, deals have fallen through where buyers’ houses are caught in a chain and cannot sell. I can think of one incredible day when four deals fell through for this reason. However, lack of supply ensures the top and entry-level sectors of our market are doing well. It is only in the over-saturated mid-market that things are looking decidedly more sticky.”

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