As we near the midway point of 2017, house sellers in Edinburgh and the Lothians have continued to benefit from a largely favourable market. House prices continue to rise, properties are typically selling in a number of weeks and the vast majority of properties are achieving a price in excess of the Home Report valuation.
Looking at properties sold by Warners in the three months to May, the average house price has increased from £201,185 a year ago to £212,676 this year – a rise of 5.7% over the year. The number of homes changing hands is also on the rise, with sales recorded by Warners up by 27.7% annually.
One of the best indicators of how the market is performing tends to be the selling prices that properties are achieving relative to the valuation in the Home Report. In the three months to May this year, 81.9% of homes sold by Warners achieved a selling price in excess of the valuation. In the same period last year that figure stood at 67.9%. At the other end of the spectrum, just 11.6% of homes sold during the last three months were secured for less than the Home Report valuation, down from 19.6% a year ago.
Although the market continues to strongly favour sellers at this stage, we have seen more signs that things are starting to cool down a little in recent months. For example, if we look at the average premium being paid above Home Report valuation, this figure – while still above what we saw at this stage last year – has actually inched down since March. In March this year properties achieved an average of 8.0% over and above the valuation but this figure fell to 7.2% in April and 5.8% in May.
Similarly, the average time being taken for properties to sell has lengthened. In April the median selling time stood at 14 days, but this rose to 20 days in May. You will tend to see some variance from month-to-month of course and, in the grand scheme of things, selling times remain very quick but overall there are signs that the balance of power between sellers and buyers has started to level off.
This levelling off in the market is not a surprise. We reported at the turn of the year that we were starting to see signs that many sellers who had delayed putting their home onto the market were finally showing a willingness to take the plunge and put their home up for sale. This has proven to be the case, and during the first five months of the year the number of properties brought to the market by Warners was almost 20% higher than at the start of 2016.
A lack of properties coming onto the market has been the main factor fuelling house price growth over the last two years. With more homeowners putting their home up for sale, the balance between supply and demand has improved and we would expect to see this impact figures in the months ahead.
Additionally, the sharp increase in house prices that we have seen for much of the last two years is simply not sustainable over the longer term. Looking further afield we have seen house prices at a national level starting to cool and, as no market works in isolation, it is reasonable to assume that we will start to see a similar trend in the local market in the coming months.
If you are thinking of buying or selling a home in Edinburgh, the Lothians or Fife, feel free to contact us on 0131 667 0232 or by emailing firstname.lastname@example.org and one of our team will be delighted to help.