City Guide to Edinburgh, Scotland

City Guide to Edinburgh, Scotland

ESPC Sees Edinburgh House Prices Rise Over 15% in October

By edg - Posted on 09 November 2009

Looking to Leith from Calton Hill

The latest monthly statistics from the ESPC show that home owners in Edinburgh continue to benefit  from record low interest rates. House prices in Edinburgh rose by 15.4% annually to £221,875, according to the ESPC statistics for October.

However, the ESPC said the rate of growth was inflated due to an increase in the proportion of larger homes sold. Three and four-bedroom properties accounted for 42% of sales in October 2009 compared to 36% during the same month last year.

“The top-line rate of house price growth has been magnified somewhat by a rise in the number of larger properties sold," said David Marshall, business analyst with ESPC, "but even when looking at properties of similar size the recent pattern of moderate growth has continued. The number of homes selling has also continued to rise and the market is certainly more favourable to sellers than it was at this stage last year."

The average price of a one or two-bedroom flat rose by 2.5% annually and now stands at £162,628. The average price of a three-bedroom house showed a slightly higher increase of 4.9% taking the average price of such homes in the Capital to £255,835.

Edinburgh is clearly benefiting from the renewed vigour in the UK property market, induced by historically low interest rates. The Nationwide said UK house prices rose sixth consecutive months up to the end of October and showed their first annual gain in 19 months - up 0.4 percent to 162,038 pounds. It also reported that the house price recovery has been accompanied by a rise in its consumer sentiment index to the highest level in 1 1/2 years.

The number of homes sold in Edinburgh during October rose by 10.9% annually. Another clear sign the property market is heating up is the fact that 47.1% of homes sold at Fixed Price achieved the asking price last month, up from 24.5% in October 2008.

The average time taken to sell a property has also fallen to just over three months having peaked at almost five months earlier in the year.

Meanwhile, the number of homes brought to the market for sale in October increased annually for the first time in 2009 as more sellers showed a willingness to test the market.

Over 650 homes were put up for sale in October 2009, up from just 476 during the same month in 2008.

"This increase in supply should help prevent inflation returning to unsustainable levels which would not be of benefit to the long-term health of the market," said Marshall.

He added: "As we move towards the end of the year we may see a further rise in sales as buyers look to take advantage of the Stamp Duty holiday before it comes to an end in the new year. Thereafter it remains likely that, while there may be some fluctuation from month-to-month, we are looking at a period of stability in terms of house prices as the market continues to recover from what has been a turbulent period.”