Warners House Price Report: December 2022

House prices in Edinburgh have continued to rise as 2022 draws to a close. Latest figures from ESPC show that the average price of property sold in Edinburgh during the three months to November was £308,868 following an annual increase of 7.8%. A similar increase of 7.2% took the average house price in East Lothian to £313,817, while the average house price in Midlothian rose by 9.7% annually to £261,074. The sharpest rise in prices occurred in West Lothian, where a year-on-year increase of 13.3% has taken the average house price in the area to £251,735.

The properties that are selling are typically doing so quickly and achieving offers well in excess of their Home Report valuation. Between September and November the average selling time for a property stood at 17 days, while the average premium paid over valuation to secure a property was 6.6%. This means that if you were looking to buy a home valued at £250,000, you would typically need to offer £266,500 in order to secure the home.

As has been the case for the last two months, there are continued signs of the market starting to cool off after two years of rapid growth. The number of homes going under offer dipped from just over 2,000 between September and November last year, to a little under 1,900 during the same period in 2022. That represents an annual fall in the number of sales being agreed of just over 7%.

Commenting on the results David Marshall, Operations Director with Warners, said: “Since the middle of 2020, market conditions have been incredibly favourable for those looking to sell a home in Edinburgh and the Lothians. For 18 months, the level of demand in the market significantly outstripped supply which pushed house prices up rapidly. More recently, high inflation and rising interest rates have reduced the spending power of buyers.

“Although the properties that are selling are doing so quickly, we are starting to see more evidence of properties that are sticking on the market for a few weeks before selling. In the last three months 22% of properties sold were marketed at a Fixed Price. During the same period last year only 13% of homes sold were marketed in that manner. This is reflective of the fact that, on average, there are fewer buyers competing for each property than was the case earlier in the year. As a result, buyers are more frequently being able to secure properties at or close to the Home Report valuation.

“Moving into 2023, the expectation is that selling prices will continue to fall more in line with valuation levels. There will still be cases where properties attract higher demand and achieve an offer well in excess of valuation, but these will be far less commonplace than was the case throughout 2021. The major beneficiaries of this shift in the market will be first-time buyers who, in many cases, have been priced out of the market due to the high premiums that often needed to be paid in order to secure a property.”

If you’re thinking of buying or selling a property, or if you have questions about the market, get in touch with Warners today on 0131 662 4747, or by email at property@warnersllp.com and one of our team will be delighted to help.