One and two bedroom flats in the city’s first time buyer hot spots are now being snapped up for far more than their home report value.
Over the last three months one bedroom flats in Leith Walk, Easter Road, Pilrig and Bonnington have achieved the highest percentage over the home report valuation, and are selling in less than two weeks – quicker than any other type of property in east central Scotland.
The average selling price in these areas has increased by 11.8 percent to £141,373.
Similarly, one bedroom flats in Abbeyhill and Meadowbank have increased by 15.7 percent to £154,973, and Gorgie and Dalry by 17.8 percent to £134,342 in what Green housing Cllr Susan Rae says is a worrying trend across the city.
“This is really bad news for the city: for our economy, for problems of traffic congestion and for our young people, who can only dream of getting somewhere affordable to live.
“It will affect all parts of the housing market and it is why I have called for Edinburgh to lead the way in introducing a rent pressure zone to tackle high housing costs and to get serious about re-using 5,000 private empty homes.
“But it is also clear that far more focus is needed on building affordable homes and keeping them affordable, whether to rent or buy. Otherwise we are already seeing the build up to the next housing crash.”
ESPC’s Maria Botha-Lopez said the lack of new homes on the market has contributed to the increase in average selling prices.
She said: “While first time buyers may be disheartened by the quick selling times and increase in average selling prices in some of Edinburgh’s most popular places, the most affordable types of properties are two bedroom flats in Craigentinny and one bedroom flats in Gorgie, for example. It would also be worth looking outside of Edinburgh, in East Lothian or west Fife, where there is less pressure on the market.”
But city estate agents are not surprised by the surge in demand one bedroom flats.
Scott Brown, estate agency partner at Warners Solicitors and Estate Agents, said: “Edinburgh continues to be a highly desirable place to live and work for young professionals, and combined with the standard practice of children leaving the family home to set up their own or as a newly married couple, it creates strong demand for one bed flats. But with the centre of Edinburgh becomes increasingly expensive, allied to the lack of new homes being built, areas relatively close to the city centre start to become hot spots.
“However, the ever-growing trend of properties going for more than Home Report values does create a serious concern to first time buyers.
“Lenders are generally only willing to lend up to the valuation figure meaning that if a buyer wants to offer more than the valuation, they will need to have the cash available to do this. This can make things particularly challenging for first-time buyers as, in most cases, these people will not have large cash reserves to draw from.”