Property Market Still Strong in the Capital

by Chris Fairbairn

Wednesday, November 22nd, 2017

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WarnersPROPERTY sellers in Edinburgh are continuing to find the market very much in their favour as the year draws to a close, according to latest figures from a leading Capital estate agent.

Despite the recent interest rate rise, the housing market in Edinburgh remains robust with the Office of National Statistics (ONS) reporting a rise in average house price in the Capital of 10.4%, a figure exceeding that seen across much of the UK.

The latest figures from Warners Solicitors and Estate Agents has suggested an increase in the premiums properties are achieving in relation to their Home Report Valuation.

David Marshall, Operations Director at Warners Solicitors & Estate Agents, said: “One of the best indicators of the strength of the Edinburgh market this year is the prices that properties are achieving relative to their Home Report valuation.

“For example, during 2016, properties sold through Warners were generally achieving an average of between 2 and 3% above their Home Report valuation. This was slightly above the levels we saw in both 2014 and 2015.

“However, this year the average premium that properties are achieving over and above the Home Report valuation has jumped substantially, hovering between 6 and 7% for most of 2017.

“Most recently, in the three months to the end of October, properties sold by Warners were achieving an average of 6.6% above their valuation.”

One of the main contributing factors attributed to the strength of the market in Edinburgh is the lack of available properties on the market coupled with the substantial growth in buyer demand.

With demand continuously outstripping supply, house prices in the Capital have been driven up, however looking to next year there are potential headwinds which could moderate price growth and swing the balance of the housing market closer to equilibrium.

In the first instance, the strength of the market is likely to persuade those hesitant to place their property on the market to make that crucial step, which would help balance out supply and demand.

Additionally, the introduction of Rent Pressure Zones could serve to dampen demand from investors, however the reality of this is that the initial measures proposed will not impact rents for advertised properties, the area where larger rental increases happen.

Despite 2017 being viewed largely as the year of the seller, it is important to note that a market where prices are rising annually by 10% is not sustainable over a long period of time.

It is likely that next year will see house price inflation regulate to more manageable levels, likely to 2 and 3% which is set to ease the pressure of first-time buyers and benefit the market as a whole in the long term.

Despite the recent interest rate rise, the housing market in Edinburgh remains robust with the Office of National Statistics (ONS) reporting a rise in average house price in the Capital of 10.4%, a figure exceeding that seen across much of the UK.

The latest figures from Warners Solicitors and Estate Agents has suggested an increase in the premiums properties are achieving in relation to their Home Report Valuation.

David Marshall, Operations Director at Warners Solicitors & Estate Agents, said: “One of the best indicators of the strength of the Edinburgh market this year is the prices that properties are achieving relative to their Home Report valuation.

“For example, during 2016, properties sold through Warners were generally achieving an average of between 2 and 3% above their Home Report valuation. This was slightly above the levels we saw in both 2014 and 2015.

“However, this year the average premium that properties are achieving over and above the Home Report valuation has jumped substantially, hovering between 6 and 7% for most of 2017.

“Most recently, in the three months to the end of October, properties sold by Warners were achieving an average of 6.6% above their valuation.”

One of the main contributing factors attributed to the strength of the market in Edinburgh is the lack of available properties on the market coupled with the substantial growth in buyer demand.

With demand continuously outstripping supply, house prices in the Capital have been driven up, however looking to next year there are potential headwinds which could moderate price growth and swing the balance of the housing market closer to equilibrium.

In the first instance, the strength of the market is likely to persuade those hesitant to place their property on the market to make that crucial step, which would help balance out supply and demand.

Additionally, the introduction of Rent Pressure Zones could serve to dampen demand from investors, however the reality of this is that the initial measures proposed will not impact rents for advertised properties, the area where larger rental increases happen.

Despite 2017 being viewed largely as the year of the seller, it is important to note that a market where prices are rising annually by 10% is not sustainable over a long period of time.

It is likely that next year will see house price inflation regulate to more manageable levels, likely to 2 and 3% which is set to ease the pressure of first-time buyers and benefit the market as a whole in the long term.

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Chris Fairbairn of Scottish public relations agency, Holyrood PR in Edinburgh

Chris Fairbairn

Chris Fairbairn is a PR account manager with award-winning public relations agency Holyrood Partnership. He is part of an expert PR team delivering PR services to a wide range of clients from headquarters in Edinburgh, Scotland.

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