HOME values across the Capital are growing faster than in any other British city – sparking warnings that properties are locked in a cycle of “hyper inflation” which will put them beyond the reach of families and first-time buyers.
Figures from property website Zoopla have revealed that Edinburgh prices have surged 8.2 per cent since January – an average £20,465 increase since the start of the year.
The rise, which puts the Capital ahead of second-placed Colchester in Essex, means the average home here has a price tag of just under £270,000 – seven-and-a-half times a typical salary in the city.
Property experts said the jump provided evidence of the core strength of Edinburgh’s housing market and was partly down to a post-referendum confidence bounce after Scotland voted to stay in the UK.
But critics warned that the trend was a blow for residents struggling to get on the property ladder.
Councillor Gavin Corbett, Green economy spokesman, said: “It’s really bad news for Edinburgh as a city and for its economy.
“The problem of hyper house price inflation is a kick in the teeth for younger households looking to buy a first home and to that growing army of Edinburgh residents who rely on private landlords for a home.
“It’s also seriously bad news for the local economy because it traps capital in decades-old bricks and mortar rather than funding the kind of small business and social enterprise which are the basis of our real wealth.”
He added: “Far from being a cause for celebration, we should be looking at measures to ensure house prices are kept within reach of ordinary families.”
The latest jump in values comes after the Edinburgh Solicitors Property Centre (ESPC) revealed average prices in east central Scotland fell by half a per cent between April and June 2015 compared with the same period last year.
ESPC analysis indicated that this could be explained by the surge in higher-priced properties brought to market at the start of the year due to the introduction of the land and buildings transaction tax (LBTT).
Maria Botha Lopez, ESPC business analyst, said that, despite LBTT-related uncertainty, Edinburgh was continuing to see good growth.
“If we compare the first six months of this year with the same period last year, we see a nine per cent growth in property prices year on year,” she said. “There was a temporary effect of LBTT following its introduction on April 1, which drove up average selling prices, but looking at the first six months on the whole gives us a better chance of balancing out the LBTT effect.”
Lawrence Hall, of Zoopla, said: “The real winner here is Scotland. The surge in property values can, in part, be explained as a post-referendum bounce, as businesses and capital flood back to Scotland, after withholding investment during the volatile September referendum period.”