Signs hint at recovery in housing market

The number of homes coming on to the market is not keeping pace with demand. Picture: Dan Phillips
The number of homes coming on to the market is not keeping pace with demand. Picture: Dan Phillips
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MORE than half the homes sold in Edinburgh are now selling for the price at which they were valued, new figures show.

The new statistics from ESPC for the period between February and April marks the first time in almost four years that most homes achieved a selling price equal to or above their Home Report valuation.

This is up by nearly a quarter compared with the same time last year with experts saying the change was a result of increased demand, meaning market conditions were moving in favour of sellers.

During the last three months, the number of homes sold in Edinburgh, the Lothians and Fife has continued to rise, with an increase of 39 per cent annually.

Meanwhile, the number of homes coming on to the market also rose, but at the more modest rate of 13 per cent annually.

David Marshall, business development manager for ESPC, said: “Over the last year and a half we’ve seen buyer demand rising, with the number of homes selling increasing sharply.

“Whilst the number of homes being brought to the market is also higher than it has been in recent years, supply is not rising as quickly as demand.

“This naturally puts sellers in a stronger position than they have been for some time and that’s reflected in the figures we’re seeing here.”

A year ago fewer than one in four homes sold in Edinburgh achieved its Home Report valuation but today more than half are exceeding their valuation.

Despite demand outstripping supply, house price inflation remains fairly modest, which is good news for buyers too.

The average house price has only risen by one per cent annually, from £198,884 to £200,895.

There are “pockets” where sharper growth has been observed but these have tended to come on the back of the earlier slump.

The average price of a one-bedroom flat in Leith and Easter Road rose by 10.4 per cent over the last three months, but this followed a 9.1 per cent decline during the same period a year ago so prices are now in line with levels seen a year ago.

Mr Marshall said: “If growth in demand were to continue to outstrip supply this would naturally exert an upward pressure on prices but – as the market strengthens and confidence continues to grow – we should see more sellers coming back to the market and this will help to ensure house price inflation remains at sustainable levels.”