House prices across Edinburgh and the Lothians have continued to increase despite the recent economic upheaval and accompanying rise in interest rates. Latest figures from ESPC show that the average house price in Edinburgh during the three months to October rose by 9% annually, with the average selling price now standing at £316,152. This marked the seventh month in a row during which annual house price inflation in the capital exceeded 5%.
Commenting on the results David Marshall, operations director with Warners, Edinburgh’s leading solicitor estate agent for property sales said: “Since lockdown was first eased in mid-2020, activity in the housing market has been hectic. Demand has consistently exceeded supply for much of that time meaning that properties for sale in Edinburgh typically spent only two weeks on the market and achieved offers well in excess of the Home Report valuation.
“During the three months to October properties sold by Warners achieved an average of 9% over their Home Report valuation. Demand for family homes continued to be highest. The average premium paid for a four-bedroom house in Edinburgh was 12% - almost double the level observed for a one or two-bedroom flat.”
Despite the apparently positive figures for sellers, there is some evidence that the market is starting to cool. Marshall continued: “We are starting to see more evidence of properties sticking on the market, and sellers switching to a Fixed Price to attract a buyer. Earlier in the year just 10% of properties for sale in Edinburgh and the Lothians were marketed at a Fixed Price. Today that figure is typically in the region of 25%. This shift can, in part, be explained by seasonal factors, as demand tends to ease off as we head towards the festive period.
“There is no question however that the recent economic uncertainty, highlighted by a rise in the cost of living and the interest rates for borrowing, has served to dampen demand as well though. Heading into the new year the expectation is that we will continue to see a better balance between supply and demand than we have seen over the last two years. Additionally, higher interest rates and a rise in the cost of living will quell the purchasing power of buyers. As a result, we should more commonly see homes selling for at or around their valuation level, with the large premiums that have been the norm in recent years becoming less commonplace.”
If you’ve got a property that you’re thinking of selling, or if you’ve got any questions about the buying and selling process, get in touch with Warners today on 0131 662 4747, or by email at email@example.com and we’ll be delighted to help.