Edinburgh house prices continue to rise, but fewer properties coming onto the market

The latest monthly House Price Report from property portal ESPC shows that house prices in Edinburgh are still rising as buyer demand continues to outweigh supply.

Monday, 6th September 2021, 4:00 pm
ESPC House Price Report August 2021. Pic: Hamish Campbell.

However, while the capital's average selling price rose 4.6%, to £292,977, in the period of June-August 2021, there are notable variations across different areas of the city.

For instance, the average selling price of homes in the city centre decreased 9.4% year-on-year, to £314,014, while the suburbs of north west Edinburgh experienced the biggest increase in the capital, with prices rising 18.7% to an average of £276,315.

Two-bedroom flats in Morningside and Merchiston recorded the biggest decline in selling price, with a 14.2% decrease taking the average to £309,474 during June-August, but two-bedroom flats in Portobello and Joppa recorded some of the highest increases, a 25.9% increase meaning the average selling price was £281,154, indicating a sustained demand for coastal living.

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Overall, three-bedroom houses continued to be among the most in-demand with buyers, particularly in the sought-after locale of South Queensferry. Here, three-bedroom houses had an average selling price of £318,286 – a 36.3% increase year-on-year.

Buyers continue to pay over Home Report valuation

Demand continued to outweigh supply during June-August 2021, meaning buyers continued to bid over Home Report valuations in order to secure their chosen property.

Buyers paid more over valuation in East Lothian than anywhere else; properties here attained 109.2% of Home Report valuation on average, up 7.3% points on 2020.

Edinburgh City Centre saw a decline of 2.2% points year-on-year, with properties achieving an average of 102.6% of Home Report valuation. This is likely due to there being more properties on the market and buyers facing less competition, as well as an overall modest reduction in the demand for city-centre living.

One-bedroom flats in the Abbeyhill and Meadowbank areas saw the steepest decline of 4.7% points year-on-year, however properties in these areas still achieved, on average, 108% of Home Report valuation.

Three-bedroom houses in the suburbs of Currie, Balerno and Juniper Green increased more than any other property type in Edinburgh, with a 14.3% points rise meaning that buyers paid an average of 113.3% of valuation.

Properties sell more quickly in Edinburgh’s suburbs

Overall, sales times decreased during June-August 2021, but again there was variation across the city with properties in the New Town and West End the slowest to go under offer, with an average selling time of 44 days, 36 days slower than during June-August 2020, while the City Centre’s average was 25 days – seven days slower than 2020.

Edinburgh South West saw properties going under offer in just 14 days, 86 days faster than the same time in 2020 and once again, three-bedroom houses in Edinburgh’s suburbs saw the highest levels of demand, with buyers acting quickly to secure properties of this type.

Three-bed houses in Currie, Balerno and Juniper Green, and in South Queensferry and Dalmeny, both had a median selling time of just nine days, 83 days and 56 days respectively faster than 2020. 36.7% of homes went to a closing date during June-August 2021, up from 26.6% in 2020, as buyer demand intensified.

Property sales rise, while the number of properties coming to market reduces

The volume of property sales increased again during June-August, however, the number of properties coming to market actually declined by 5.8%, potentially a sign that the post-lockdown demand is beginning to slow.

Two-bedroom flats in Leith had the highest sales volume, up 133.3% year-on-year, and Leith also had the highest volume of properties coming to market in the Edinburgh area, although this figure was actually down 4.5% on 2020.

Paul Hilton, CEO of ESPC, said: “Although the picture largely looks the same across the property market during June to August this year, we are starting to see some changes come into play. Average sales prices are continuing to rise in many areas, particularly in coastal and countryside locations.

“As the volume of properties coming to market begins to return to the levels we saw pre-pandemic, we are still seeing higher levels of activity from buyers, which will mean that buyer demand will continue to outweigh the supply of properties available.

"This, in turn, may affect average selling prices in the months to come, and we may see an increase in both the amount of homes going to closing dates, and the amount over Home Report valuation that buyers are willing to pay."

For more from ESPC, or to view properties currently on the market, visit espc.com.