Edinburgh house prices set to soar well above UK average over next 4 years

Property prices in Edinburgh are set to soar once more. Picture: TSPL
Property prices in Edinburgh are set to soar once more. Picture: TSPL
0
Have your say

The cost of housing in Edinburgh is set to rise above UK averages over the next five years, according to market analysis.

Figures published by property consultancy firm JLL forecast it will become more expensive to buy or rent a home in the Capital.

JLL said by 2023, prices will rise in Edinburgh by 16.5% and in Glasgow by 13.7%.

Across Scotland, there is expected to be more moderate growth of around 11.5% - marginally outperforming the UK five-year forecast of 11.4%.

House price growth in Scotland has increased 17% in the past five years, below the growth of 31% seen across the UK.

The firm said Scotland, like the rest of the UK, has under-delivered the number of homes needed to meet demand or to achieve the required targets.

The average sales price of a typical two-bed flat in Edinburgh city centre at the end of 2018 was £285,000, a 2.5% increase on the same period in 2017.

Price and rental growth in Edinburgh is expected to average 3.1% per annum, well above the UK-wide forecast of 2.2% price growth and 2.4% rental growth.

JLL said the Glasgow market has been characterised by an under-supply of housing for several years, particularly in the city centre.

This has been attributed to a shift in interest during 2017 from an almost entirely build-for-sale bias towards an emphasis on build-to-rent.

In Glasgow’s planning pipeline, JLL suggested there are around 4,000 build-to-rent units, many of which are set to be completed around 2021 and 2022.

The sale price of a typical new-build, two-bed flat in Glasgow city centre is around £226,000, an increase of 1.8% during 2018.

Over the next five years, JLL expects sales prices to rise by an average of 2.6% - below that of many other UK city centres suffering from more acute demand-supply imbalances, but greater than the UK-wide and Scotland forecasts.

Rent costs in Glasgow are also set to grow by 3% over the same period, JLL said.

The firm’s Jason Hogg said: “In recent years Scotland’s major cities have established themselves as stand-out performers in the residential market, with Edinburgh and to a lesser extent Glasgow seeing above average house price growth.

“This has been aided by the significant supply shortfall and growing demand from people wanting to live in city centres.

“The moderate growth across Scotland’s house prices are somewhat skewed by the above average performance of both Edinburgh and Glasgow, which are both set to see strong growth as limited development activity creates further discord between demand and supply.”

Join our Facebook group Our Edinburgh to share images and news from and around the Capital