If you haven’t already had a chance to read the latest ESPC House Price Report then it makes for interesting reading.
In many ways the Report confirms what is already acknowledged in the property profession in Edinburgh; namely that property prices continue to rise in and around Edinburgh and that the most likely explanation for this is that fewer properties are being brought to the market creating an imbalance between sellers and buyers in favour of sellers and resulting in property price increases.
And certainly we are seeing evidence of this every week with buyers ( particularly first time buyers) in competition at closing dates and having to offer well over the home report value and we mean significantly more. And almost all of the properties we list are getting multiple interests and selling at closing dates.
Which areas of Edinburgh are experiencing bigger price increases?
This is the interesting part of the Report. It compares property prices over the quarter Dec 2017 – Feb 2018 with the quarter for Dec 2016 – Feb 2017.
Now it has to be said that these are just averages but this is what the Report tells us:
- The average price of a 2-bedroom flat in Portobello/Joppa increased by 28.6%
- The average price of a 2-bedroom flat in Trinity/Newhaven/Inverleith increased by 23.4%
- The average price of a 1-bedroom flat in Dalry/Gorgie/Slateford/Chesser increased by 28.5%
- The average price of a 3-bedroom house in Liberton/Gilmerton increased by 28.2%
Those are huge increases.
More locally to us:
- The average price of a 1-bedroom flat in Leith Walk/ Easter Road / Pilrig / Bonnington increased by 17.1%
- The average price of a 2-bedroom flat in Leith/ The Shore / Granton increased by 10.8%
Not all areas of Edinburgh are experiencing these high price increases. The report shows:
- The average price of a 3-bedroom house in Corstorphine/ Clermiston/South Gyle/ East Craigs fell by 9.3%
- The average price of a 1-bedroom flat in Polwarth/Shandon/Tollcross fell by 2.2%
What does this mean for Sellers in Edinburgh?
Without a doubt, the current property market in Edinburgh favours sellers but if you are a seller looking to move up the property ladder then you will probably find that (1) there are fewer properties for you to choose from and (2) since you are likely to be in competition for those properties you have to expect to have to pay a premium (ie offer well over the home report value) for those properties.
And this is of course part of the reason why there are fewer properties coming onto the market. Sellers looking to move up are finding nothing they want to buy.
The fear for such sellers is that they will put their property on the market, sell quickly and make a tidy profit but will then find themselves unable to find a new property they like enough to want to buy. The end result would be that they will then be forced into rented accommodation until they then find a suitable property. So, two moves instead of one and renting can be quite expensive when compared to paying a mortgage.
It is possible to buy before you sell but the property industry is still a little prejudiced by this and prefers a buyer who already has their property under offer. But this is likely to become more common and it is hoped that the professionals in the property market will become a little more tolerant of such sellers/buyers as we go through 2018.
But there are several types of seller which really do stand to gain from the current market:
- Sellers looking to move away from Edinburgh to places like Midlothian and Fife
- Sellers looking to move into a new build property
- Sellers looking to downsize
- Landlords looking to sell an investment property