The Stewart Milne Group’s decision to open its first office in Edinburgh is another sign that the property market is edging back to where it was before the crash.
The Aberdeen-based housebuilder is no stranger to Edinburgh, having paid what then seemed like a staggering £6 million for the St Dennis and Cranley School site in Merchiston after it merged with St Margaret’s School in 1998.
St Dennis and Cranley was a collection of Victorian houses and newer school buildings between Ettrick Road and Napier Road, where single houses have subsequently sold for £2m.
The Aberdeen FC chief’s house building firm converted the site into low-rise blocks of flats as well as grander apartments in the old buildings just before the peak of the boom, so the £6m quickly seemed like a steal.
A look at the Edinburgh Solicitors’ Property Centre records shows that the really crazy period was not just before the banks crashed in 2008 (in fact the property market didn’t properly go into a tailspin until 2011), but six years before.
In 2002 across all sectors, property prices in Edinburgh ballooned by a staggering 30 or so per cent almost continuously throughout the year. Those developers like Stewart Milne who were able to acquire sites and complete building work going into 2002 made a killing.
The following year price increases had returned to more manageable levels, but they were still into double figures and pretty much remained that way until the bubble burst. Not all sectors enjoyed sustained big increases; in particular newly-built four-bed detached suburban homes were slow because widespread house building meant there was a steady supply.
If you wanted a modern house, you didn’t need to buy one someone had just lived in, you bought your own brand spanking new from the wide choice available, especially in places within easy reach of Edinburgh like Broxburn and Newtongrange. Only the collapse of new home building got the nearly-new market moving.
With the Borders Railway still on course for opening next year, the impact on housing supply and prices near the stations at Gorebridge, Newtongrange, Eskbank and Shawfair will be closely watched.
Newcraighall and Brunstane, both with existing stations, have long been attractive to developers, the former recently being the centre of much local anger after the approval of a plan to build around 200 new houses. Shawfair was supposed to be the heart of what would effectively be a new town on the site of Monktonhall Colliery but which hit the buffers in 2008. Now Midlothian Council hopes the new station will spark the resurrection of the grand scheme with the construction of 10,000 homes in the next 15 years.
If that means around 10,000 commuters, that might prove a challenge for a rail service which will be running only every half hour. A genuine commuter line will need more than double that frequency but it won’t stop housebuilders using it as part of their pitch.
Tramline 4 running from Sheriffhall park-and-ride all the way past Danderhall, the bioscience park, the new ERI and Cameron Toll anyone? Thought not. Too revolutionary, but the problem of moving that number of people about will not go away and already the City Bypass struggles in the rush hour.
If Shawfair does get going, just watch the bottom falling out of the nearly-new market in the south east of the city just as the rest of the market begins to get going.
There is much talk of another property bubble looming fast, and while that may be true in London, where it is said the average house earned more than the average person last year, the statistics here don’t bear that out.
In the first quarter of this year, the number of sales across East Central Scotland might have risen by 57 per cent but it is still from a very low base. Although sales are at their highest level for the first quarter since 2008, again the statistics show that by then the market had already started to flag and a brief rally in 2009 proved to be a false dawn. Again, a rise of 19 per cent in the number of houses going on the market at the same time last year is from a low base.
The inescapable figure is that prices in Edinburgh rose by only just over one per cent in the first quarter of 2014, to an average price of £195,500, so here at least the bubble has a long way to go before it is ready to pop.
Behind the figures though are some interesting numbers; those four-bed detached family houses are up by seven per cent to an average of £403,000, which probably reflects the continued lack of supply of new builds. But with an average of 240 days on the market they are taking longer to sell than any other house type. The big rise is in one-bedroom flats in Gorgie/Dalry and Leith Walk/Easter Road which are now selling around the £100,000 mark, up about 13 per cent. That suggests more first-time buyers and therefore the chance of more demand for bigger properties in two or three years’ time.
A quick trawl around the Register of Scotland property search site shows that new flats are beginning to sell well too. Down Robertson Avenue way in Slateford, a steady stream of new flats was sold in the last six months.
But if you want a real sign of a pick-up, only this month in the same area, car parking spaces went for £142,000. I presume it was more than one.
THE MUIR THE MERRIER
Hooray, we’re on the John Muir Way! I greeted the launch of the 134-mile coast-to-coast walk named after our most celebrated conservationist not least because it is estimated it will boost the economy to the tune of £40 million a year.
Maybe I should get the kids to sell exorbitantly-priced cans of cold lemonade to the droves of American eco-tourists we are now expecting along the canal towpath, or convert the tool shed into a bunkhouse?
There is a very useful website which tells you all you need to know about walking or cycling from Dunbar to Helensburgh. There is a warning about negotiating Edinburgh streets to get from the end of the canal to the “sanctuary” of The Meadows.
The citizens of Tollcross should be outraged at this affront. And no mention of a quick livener at Bennett’s or Cloisters? The least said about the Liquorice lap dancing bar the better.
WHEN IN ROME . . YOU’LL COUGH UP
The announcement of a £10 spot fine if you ride on the Edinburgh tram without a valid ticket seems somewhat lenient, compared with the penalties faced elsewhere.
Fare dodging on a train usually carries a £20 penalty but in London, travelling on Transport for London services without a ticket will result in an £80 charge, reduced to £40 if you cough up quickly.
The Dublin tram imposes a euphemist-ically titled standard charge of 45 euros and the inspectors can get you on the platform as well as on the tram. The Luas made a profit of 1.3m euros last year so they must be getting something right.
But in some cities, even if you’ve bought a ticket you might not escape the clutches of the inspectors.
In Rome you can handily buy a bus ticket at cafes and kiosks, but woe betide you if you forget or – more likely if you’re a tourist – don’t know to use the on-board machines to get a date stamp. My wife and I made that mistake there four years ago when over for the rugby international and as a result the weekend cost us 50 euros each more than we expected.
We bought the tickets, got on the bus and were enjoying the ride to the Coliseum when the gang of aviator-shaded officially-sanctioned extortionists descended.
No amount of explanation that we had bought tickets or that the driver did not explain we needed a stamp would cut it. It was also explained that if we refused to pay we’d be arrested and spend 24 hours in chokey rather than an afternoon in the Stadio Flaminio.
The way Edinburgh bus drivers deal sympathetically with tourists is in stark contrast to our experience of their Roman counterparts and with the tourism training being given to our new ticketing services assistants I don’t doubt that will continue.