The average Edinburgh house price continues to rise according to the latest quarterly statistics from the ESPC. Buoyed by historically low interest rates (the Bank of England rate has been unchanged at 0.5% since March 2009), the average house price in Edinburgh rose by 10.3% annually to £229,787 in the third quarter of 2010.
Overall, the average house price across East Central Scotland rose by 9.1% annually to £213,412, against the ESPC's previous forecasts. This marked the fourth consecutive quarter in which house prices have risen annually.
In early 2010, David Marshall, business analyst with the ESPC, said that he expected prices "to remain largely unchanged" over the course of the year.
"Previously we had expected the growth in prices over recent months to be short-lived with prices easing back before the end of the year, " said Marshall yesterday. "It now appears likely this may not happen until early next year, but we still expect house prices to ease back to levels seen at the start of 2010 in the next few months.”
The house price statistics reveal a very different picture at either end of the market with larger properties booming and the prices for smaller properties deflating.
Marshall added: "Ultimately the difficulties which many still face in getting on the property ladder will have a knock-on effect on demand further up the ladder. This means the strong growth in the value of family homes we have seen recently is unlikely to be prolonged."
Edinburgh: Tale of Two Cities
While Edinburgh City Centre properties rose an average 17.7% during the period, and 4-bedroom family homes in the suburbs saw a price increase of 12.2%, average prices for 1-bedroom flats in Gorgie/Dalry fell 3.3% and 1-bedroom flats in Leith Walk/Easter Road fell by 8% annually.
The ESPC said the rate of growth in City Centre properties was inflated by the sale of more £1million properties this year. Those aside, growth stood at a more modest, but still substantial, 12.4%.
The solicitor centre also pointed out that across the city as a whole the average price of a one-bedroom flat was almost unchanged, rising just £254 from £129,059 last year to £129,313 during the third quarter in 2010.
The ESPC recorded just over 1,525 completed sales in Edinburgh during the three months to September, compared with 1,366 for the same period last year, an increase of 11.6%.
Regional Analysis – The Lothians
Average house prices rose across the Lothians during the third quarter of 2010 though growth in West and Midlothian eased following sharp rises during the second quarter.
West Lothian saw a rise of 1.6% to £156,892 and in Midlothian an increase of just 0.2% took the average to £160,568. In East Lothian however, recent strong growth continued.
The average house price rose by 7.8% year-on-year, marking the fifth consecutive quarter in which annual growth had exceeded 7%. The new average house price in the area of £225,600 was also the highest on record.
Marshall explained: “As expected, the sharp rises seen in West Lothian and Midlothian in spring this year proved to be a short-term spike with prices for this most recent period back in line with the sort of figures we‟ve been seeing over most of the last two years."
"East Lothian continues to see some of the strongest growth of any area in East Central Scotland. Much of the reason for this is that there is a large stock of quality, family homes in the area and it is these properties which are continuing to attract buyers in the current market. The area is also underpinned by some strong fundamentals with good local amenities and schools, as well as it being within easy commuting distance of Edinburgh. Obviously no market works in isolation and such high levels of growth are unlikely to be prolonged, but the area has certainly bucked the trend somewhat over the last 18 months.”
Regional Analysis – West Fife & Kinross
In West Fife & Kinross the average selling price of a home sold between July and September rose by 10.8% annually to £139,217.
This growth followed a decline of 12% during the same period in 2009 however, leaving the average for the area broadly unchanged for most of the last 18 months. In Dunfermline the average house price rose from £126,456 to £137,014.
The number of homes sold in West Fife & Kinross increased annually for the fourth consecutive period with sales up 23% compared to the third quarter of 2009. Selling times also showed improvement with sales now taking around three months to complete, down by three weeks compared to 2009.
Malcolm Cannon, ESPC chief executive concluded: “The figures for the third quarter in Fife point to a strengthening in the market, but as with other areas it is important to frame these results in context. The number of homes selling is still below that seen prior to the downturn and, like the rest of the country, the local market is likely to be impacted by public sector cuts in the upcoming Spending Review. With more properties on the market the balance of power has shifted towards the buyer again over the last few months and sellers should be aware of this when they enter into
negotiations in the months ahead.”