While there are certainly still a few bumps in the road before we hit the wide, straight boulevard of a fully functioning residential property market in Scotland’s capital city, at least some of the signals are flashing green.
Values across the board are steadily increasing, with a recent Edinburgh Solicitors’ Property Centre’s report showing that average prices achieved in Edinburgh and surrounding areas are up by 5% compared to the same time last year.
The main obstacle to rapid onward progress remains, as it has for the past few years, the lack of supply in the market, with vendors still showing an understandable reluctance to take the plunge.
Some potential sellers simply can’t see where they would move to and the limited number of available properties can create something of a vicious circle.
The positive news is that there is significant new build activity in and around the city, both ongoing and proposed. As these properties come on stream, they will unlock doors for sellers who may be pleased to jump at a guaranteed, chain-less purchase.
Of course, Brexit is still to some extent putting the dampers on economic activity, not just in Edinburgh. But at the same time there are signs of Brexit fatigue and an acceptance that people cannot put their lives on hold forever.
More fundamentally, the elements which will eventually drive the market forward into the fast lane are all in place – that is, low interest rates, good mortgage availability from willing lenders and the fact that Edinburgh retains a unique attractiveness as a place to live.
An indicator of the importance that lifestyle assumes for buyers is the fact that coastal areas close to the city, such as Portobello and Joppa, have seen above average increases year on year. With good housing stock this part of town can appear as a seaside idyll.
Other hotspots are perennial favourites are areas closer to the city centre such as Stockbridge, Comely Bank, New Town and Bruntsfield, with Marchmont often top of the wish list for student accommodation.
Unlike other major cities, there are few sluggish areas in Edinburgh. Properties in some districts might spend more time on the market but generally they are still achieving above or around Home Report values. Premiums of up to 20% are not unheard of, although they are not the norm.
First time buyers are also once again providing a vital stimulus to the bottom end of the market, aided by the Scottish Government’s shared equity LIFT scheme, although this is restricted to properties within certain price thresholds.
As this year fades into winter, we can look at how some typical values stand. A flat in Gorgie, for instance, near Tynecastle Stadium and west of the city centre – would be likely to fetch between £120,000 and £140,000.
A three-bed 1970s semi in a suburb such as Currie and Baberton might go for £275,000 to £300,000. Conversely, a typical two-bed flat in Marchmont could attract between £300,000 and £400,000.
At the upper end, a stone-built semi with five/six bedrooms in an area such as Morningside would need between £875,000 and £1.1 million to secure it. Though LBTT is onerous in this arena, it largely seems to have been factored in to the bigger transactions.
Going back to new build, it is hardly surprising that the city is a prime target for housebuilders. Various developers are active at a number of sites on the south side within Mortonhall, Gilmerton, and Craigmillar amongst other areas. Cala continues to build executive homes at Balerno and there are many more homes proposed on the western side of the city at East Craigs and to the south near the village of Bilston.
Some of these new properties will be a few years coming through, but they should serve to open up the market, enticing sellers with attractive packages including assisted sales, part exchange and definite moving dates.
It should all help to increase fluidity in the market, which is exactly what we need right now.