First-time buyer boom in city property market

Richard and Catherine Haig, with Lisa Venter from ESPC, are looking to buy their first marital home. Picture: Scott Louden
Richard and Catherine Haig, with Lisa Venter from ESPC, are looking to buy their first marital home. Picture: Scott Louden
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THE age of first-time buyers is plummeting in a clear sign a major Edinburgh housing boom is under way, property experts have revealed.

Since the downturn, a first home has been out of reach to many young people, with the average age of first-time buyers in Edinburgh rocketing to 38.

But government-backed incentives such as help-to-buy plus a greater availability of competitive mortgages is resulting in the age of those signing on the dotted line falling to 28-33, anecdotally, and first-time buyer activity increasing 35 per cent year on year, according to the latest figures provided by ESPC. First-time buyers now account for a quarter of the Capital’s overall market.

Paul Hilton, sales and marketing director at ESPC, said first-time buyers are the lifeblood of the housing market.

“We haven’t got specific figures but the fresh-face test suggests first-time buyers are getting younger,” he said. “The last research found that the average age for a first-time buyer was 38 and that is definitely dropping.

“Market conditions are improving in and around Edinburgh for first-time buyers. For a long time people struggled to get deposits but they have had plenty of time to save. Banks and building societies are also becoming more flexible.”

He was speaking at a specialist advice session hosted by ESPC at their George Street headquarters. The popular free events are intended to provide a one-stop-shop for first-time buyers, providing them with all the help they need through property specialists and independent financial advisers.

Mr Hilton said: “There is a lot of information to get through to work out which is the best way to support each buyer to secure their new home.

“Our open evenings attract a lot of interest and, by bringing all the advisers into one place, make it an ideal opportunity for those seriously looking to buy a home to get access to all the information they need to reach a decision.”

David Marshall, business development manager at ESPC, agreed the first-time buyers’ market was looking up.

“Conditions are more favourable for sellers than they have been for some time. That said, it’s probably fair to say that it’s still just about a buyers’ market,” he said.

“As a buyer you are still in a pretty strong position. Around 400 properties have come on the market in Edinburgh and the Lothians in the last week, around 250 of these just in Edinburgh.”

For sale signs on properties across the Capital are being whipped down almost as soon as they’re put up as buyers rush to snap up homes within days of them going on the market.

The ESPC revealed the number of sales in the city had hit their highest level since 2008.

Demand in the first three months of this year has led to a massive 56.3 per cent rise in sales when compared with the same period last year.

More flexibility from lenders has been credited as one of the key reasons buyers are taking the plunge on properties they fancy.

And – despite fears of a housing bubble – there have been some notable sales since the key spring market started.

A three-bedroom house in Observatory Green, Blackford, sold on Wednesday – just 24 hours after going on the market – for more than £405,000.

Meanwhile, a two-bedroom home in Juniper Place lasted just three days before it was snapped up on Monday for £140,000.

Mr Hilton was keen to stress that while the market is moving, a “boom” in property sales and prices was not on the horizon.

He said: “Activity levels are nowhere near what they had been at the height of the market.

“Last year was a good year but we are certainly not in a boom market. Contrary to popular belief, we don’t want a boom because it is followed by a bust.”

The development comes after the News told yesterday how a new report from the Royal Institution of Chartered Surveyors (RICS) claimed a shortage of homes on the market across the UK was pushing property prices up.

But the ESPC figures show that the number of properties in the Capital on the market between January and March this year was 18.9 per cent higher than the same period in 2013.

And Mr Hilton added: “We are unlikely to see a return to the days of reckless lending and 100 per cent mortgages because there is now greater regulation because of organisations like the Mortgage Market Review (MMR). The average time a house stays on the market has come down by a month, but we are certainly not seeing rampant house price inflation.”

David Marshall, business development manager for the ESPC, said: “We’re continuing to see a real improvement in the number of properties changing hands, which is obviously great news for anybody looking to move home.

“At this stage, house price inflation in most areas is comparatively low.

“The number of homes is increasing, but the selling prices are not shooting up. The average price in the first quarter was only 1.1 per cent higher than the same time last year.”

He added: “Sales are at the highest level since the first half of 2008.

“As more people start to see more fair sales bids, you’ll see more sellers being attracted back to the market.”

People tend to start their house-hunt with a set criteria in their minds but may revise their expectations.

Mr Marshall added: “People think, I can move another ex-minutes outside the city centre, and get an extra bedroom. There are quite a lot of affordable places in Gorgie and Dalry, and areas like Polwarth. These are really good investments.”

‘We want more space and a garden’

CATHERINE and Richard Haig, both 28, are renting in Newington.

But the couple, who tied the knot in November, are looking for their first married home in Midlothian, preferably in Penicuik, for around £150,000.

Catherine, who works as a civil servant, said: “We are both from Penicuik and we are looking to head out more towards that area because we can get a lot more for our money than in Edinburgh.

“We have managed to save a bit of money, about £10,000 with help from our parents. We also had a fund left over from our wedding of about £2000.”

Richard, who works in IT, added: “Now we are married, the next stage in life is to get our own house and then hopefully start a family. We want more space and where we are now hasn’t got a proper garden.”

One woman who has already managed to get on the property ladder is Emma Loane, 30, who has bought a two-bedroom flat at a converted mill in The Shore, Leith.

Emma, who moved to the Capital four years ago from Norfolk, has worked in hotels across the Capital.

After receiving a lump sum in inheritance, Emma decided to use the money to buy her own house.

She wanted a two-bedroom property so she could let the second room as a source of income.

She viewed a total of seven properties and ended up choosing the sixth after falling in love with its period features.

She said: “I wanted to take advantage of the market as prices at the moment are favourable to first-time buyers like me.

“After years of renting I wanted to own my own home and potentially rent the second room to someone else.”

‘The market is about to explode’

BEN Cullen, 29, is renting in the New Town. He said: “I believe the market is about to explode, and I am hoping to get on before it does.”

An engineer with the Merchant Navy, he is looking to buy a two bedroom flat so he can rent out one of the rooms to help with his mortgage repayments. But at this stage, he does not know whether he has sufficient funds to pay a deposit on his first home. He said: “That’s why I’m here, to find out if I have enough money.” Deposits for first- time buyers are as high as £30,000.

Prices bounce back after falls last year

IN areas which have seen sharper price rises, this has generally been offset by falls a year earlier.

A 13.3 per cent increase in the average price of a one-bed flat in Gorgie and Dalry followed a decline of 8.7 per cent last year.

Similarly, in areas where prices have fallen, this most commonly came after a rise early last year.

A 13.7 per cent decline in East Lothian was largely offset by a 12.1 per cent rise during the first quarter of 2013.

With buyer demand on the rise, sellers are now in a stronger position than they have been for some time.

Average house prices in Edinburgh rose by 1.1 per cent annually to £195,531, according to the ESPC figures, while Midlothian and West Lothian saw annual growth of 0.5 per cent and 0.8 per cent respectively.