Sales to super-rich build up Capital’s property market

The �3.5m Castle Gogar attracted overseas interest
The �3.5m Castle Gogar attracted overseas interest
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SUPER-rich buyers from Russia and the Far East are fuelling Edinburgh’s millionaire property market, it was revealed today.

Property agents say purchases from abroad have boosted £1 million plus sales again after a huge slump.

The past two years have seen a better-than-expected recovery, with wealthy foreigners shunning London for the Capital, attracted by its schools and standard of living. And it is hoped the decision in the budget to raise stamp duty for homes over £2 million will send more buyers north.

Sales of super-prime homes plunged by 68 per cent between 2007 and 2009, linked to the recession and the banking crisis. But a significant recovery is now under way with 62 sales in 2011 and 73 in 2010 – up from just 46 in 2009.

Anecdotally, some agents have found more than half of their inquiries for high-end properties are now from overseas. Foreign buyers accounted for around ten per cent of sales.

Potential purchases are kept discreet, but it is understood that 7 Albyn Place, a £2m-plus five-storey townhouse off Queen Street, and Castle Gogar, the £3.5m sprawling 17th-century mansion in west Edinburgh – both currently on the market – have attracted foreign interest.

Property agents are seeing more and more interest from buyers in emerging economies, which have been affected less by the economic downturn.

Dr John Boyle, head of research at high-end property agents Rettie, said: “It’s a mixed buyer profile. You get clients from the Far East and Russia and they buy because they’re looking to relocate for work here or because they want their child to go to one of Edinburgh’s best schools and then the University of Edinburgh.”

He added: “London property is now seen as overpriced. And, as of last week, buyers have to pay higher stamp duty on £2m-plus [houses], and we have very few of those.” Matthew Munro, head of Edinburgh city sales at Knight Frank, said: “We’re seeing most of the take from Taiwanese and Chinese, along with expats from Dubai, France and Singapore returning to the UK.

“The prime market in central London is £4000-6000 per sq ft and Edinburgh is £400-500 sq ft. That makes a difference.

“They’re also coming to Edinburgh because the schools here are world-renowned. One private school here is already holding classes in Mandarin.”

Other property experts believe there a “spill-out” from investors put off by properties in London – where townhouses often fetch £15-£20m – is still to come.

While most of the movement in the market comes from properties of between £1m-£2m, there were four sales of £2m-plus.

Jamie Macnab, director of Savills, said Edinburgh benefits from Scotland’s global appeal.

He said: “There are 30 million people worldwide who claim Scottish descent. It’s remarkable how often you come across that with buyers from Hong Kong and New York.

“Quality of life and excellence in education appeals immensely and that, in part, is bringing people to Edinburgh.”