House Price Report: September 2016
As anyone keeping an eye on the local property market will know, the first half of 2016 was a great time for those looking to sell their home in Edinburgh or the Lothians. Properties for sale in the area typically spent less than four weeks on the market, with most sellers achieving a selling price equal to or above their home’s Home Report valuation.
With the last of the summer sun now behind us Warners’ David Marshall and Andrew Whitmey of Umega Lettings take a look at the latest facts and figures in both the sales and rental market.
An Upturn in Supply, But Sellers Still Hold Sway
During the first half of 2016, the consistent pattern was one of demand from buyers outstripping the supply of properties coming onto the market.
During the summer months that situation was exacerbated as David Marshall, Operations Director with Warners, explains: “Over the summer, we saw a dip in the number of homes coming onto the market, with many families heading off on holiday to enjoy the sun. The number of buyer enquiries we were receiving remained as high as it was between April and June though meaning that the excess of demand over supply grew further.
“As a result sellers, who were already in a strong position in the market, saw their position strengthen further during July and August. That naturally exerted an upward pressure on prices, with the latest House Price Report from ESPC showing that the average house price in Edinburgh rose by 7.7% annually during the three months to August.
“Over the last three weeks we have seen the supply of homes coming onto the market rising again which will help to moderate house price growth as we head towards the end of the year, but there is no question that for most sellers conditions will remain very favourable in coming months.”
Demand Booming in Portobello
Demand from buyers has been especially high in the Portobello area of the Capital, with many properties snapped up within days of going on the market. David Marshall commented: “For many buyers Portobello offers the best of both worlds as it has a fantastic beach right on the doorstep whilst lying just three or four miles from the city centre. Invariably those who are looking to sell in Portbello want to stay within the area.
“With the supply of properties to the market relatively low for much of 2016, it has been increasingly popular for people thinking of moving within Portobello to wait until they have found somewhere that they want to buy at which point they make an offer that’s subject to the sale of their own property.
“Portobello is also massively popular with those who moved away a number of years ago because of work and are now looking to move back to Edinburgh. For those moving back from London, a family home within walking distance of the beach and easy reach of the city centre for just over £400,000 seems like remarkable value and demand from this area has really helped the local market to thrive.”
Strong Rents in Portobello
The rental market in Portobello has also been booming over the past 6 months according to Andrew Whitmey, Director at Umega Lettings: “We had three properties for let on Kings Road which let quickly for between £550 and £595 per month. Looking at the figures for the wider Portobello area, one bedrooms will let for between £525 and £675 per month while two bedroom properties will fetch around £675 to £850. The new-build properties on Bath Street, overlooking the river Forth are attracting tenants at well over the £1,000 mark.
Student Properties Hit Records Highs
About a quarter of Umega Lettings’ managed property is made up of properties around traditional ‘student areas’ including Marchmont, Newington, Bruntsfield and The Meadows, and demand for these properties has reached new highs.
Andrew Whitmey commented: “We’ve seen a massive surge in rents for these properties smashing through the £500 per room mark for students who have settled in for the 2016-2017 academic year. That’s an increase of over 6% on last year’s rents which were already a big jump on the previous year.
“Despite more and more purpose-built student accommodation popping up all over Edinburgh - including the redevelopment of the Homebase site on St Leonard’s Street and the various developments on Causewayside - we are not seeing any signs of demand falling for privately-rented accommodation as many students opt to live in shared flats in the more traditional buildings around Marchmont, Newington and The Meadows.”
Rents on the Rise Throughout Edinburgh
It’s not just the student properties that are seeing a jump in rents. According to The Citylets quarterly report rents across Edinburgh are up 7% since 2015 and over 20% in the last three years.
Rents for properties in popular buy to let locations including Polwarth, Fountainbridge, Dalry and Gorgie also continue to climb as tenant demand outstrips supply. The average rent for a 1 bedroom property in Edinburgh is creeping ever closer to £700 per month (a jump of almost £100 from this time 2 years ago) while average rents for 2 bedroom rents in Edinburgh have broken the £900 mark for the first time (again, a £100 increase from this time in 2014).
Andrew Whitmey said: “Rising rents are obviously great news for investors who are also enjoying strong capital growth as house prices inch upwards. For those looking to rent though, these figures present a real challenge. For anyone looking to rent, I’d recommend registering with websites like Citylets and Rightmove to make sure that you’re notified as soon as properties that fit your needs come onto the market. It’s also worth spreading the net wide and bear in mind that in the current market, you may have to compromise a little either on the location or size of property that you’re looking for.”