Edinburgh house prices rise at twice the national average

Property prices in the Capital have overtaken those in Aberdeen. Picture: Jane Barlow
Property prices in the Capital have overtaken those in Aberdeen. Picture: Jane Barlow
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FIRST-TIME buyers are finding it harder to get a foot on the property ladder as latest statistics show house prices in Edinburgh rising at twice the national average.

Statistics from Registers of Scotland show the average house price in the Capital for October-December was £233,255 – an increase of 3.2 per cent on the same quarter the previous year.

Edinburgh is a very popular place and a fair bit of the money that comes into Scotland for the buy-to-let market ends up in Edinburgh.

David Alexander

Edinburgh also recorded the highest volume of sales at 3532, up 21.4 per cent, while the largest drop was in Aberdeen where the number of sales was down 12 per cent.

David Alexander, of city estate agents DJ Alexander, said those starting out in the housing market in the Capital faced a tough time – not only in competition with fellow first-time buyers but also up against buy-to-let investors.

He said: “Edinburgh is a very popular place and a fair bit of the money that comes into Scotland for the buy-to-let market ends up in Edinburgh.

“It’s a very buoyant market at the best of times and anyone with money to invest in buy-to-let would naturally look here.

“Aberdeen used to be pretty good but the drop in the oil price has made things pretty depressed, so it’s no surprise to see Edinburgh at number one.”

He said Stockbridge was an example of an area attractive both to would-be owner-occupiers and buy-to-let investors.

“I was just looking at a flat in Stockbridge for someone. It’s on sale for offers over £170,000 and it’s been on the market just a few days but there are already ten notes of interest.

“It’s not easy for first-time buyers. There’s a lot of competition, which pushes up prices, and the banks are looking for substantial deposits.”

The next three months could prove particularly competitive. From April, there will be a three per cent stamp duty surcharge on buy-to-let properties, leaving a small window of opportunity between now and then for investors to buy at the same rate as owner-occupiers.

Mr Alexander said the new Land and Building Transaction Tax, which means a higher levy on the most expensive properties, had led to a marked slow-down in that sector. “There is very much a two-tier market just now,” he said. “At the bottom end there is huge demand which has meant prices have increased substantially. And at the high end, very little demand and prices stable at best.”

Edinburgh remained the largest market with sales of just under £824 million for the quarter, up 25.3 per cent on the previous year.

The total volume of residential sales in Scotland rose 14.5 per cent in the quarter to December. The highest percentage rise in volume of sales was in Midlothian, with an annual increase of 30.2 per cent to 539 residential sales compared with the same quarter last year.

Kenny Crawford, of Registers of Scotland, said prices had reached their highest since RoS quarterly statistics began in 2003, suggesting “a more robust and active property market”.

ian.swanson@edinburghnews.com