Sales Up, Prices Down in Edinburgh Housing Market

Submitted by edg on Thu, 10 Jan '13 10.49am

A continuation in the fall of house prices in East Central Scotland, has brought a rise in the number of house sales.

In its latest report on the housing market for the last three months, the ESPC says the total number of homes sold across Edinburgh, the Lothians and Fife rose by 11.3% annually to the highest level recorded during the fourth quarter since 2007.

At the same time, prices declined in most areas. The average house price in Edinburgh during the fourth quarter of 2012 stood at £202,266 following a year-on-year decline of 8.5% according to latest figures from ESPC. It marks the fifth consecutive month during which the average house price in the Capital had fallen on annual basis.

In East Lothian and Midlothian house prices were also below 2011 levels. A 2.2% fall in East Lothian took the average house price to £187,370 while in Midlothian an annual decrease of 3.7% brought the average house price to £163,207.

“As was the case for most of 2012, we saw a larger number of homes being bought and sold but in most areas prices are lower than they were a year ago. Buyers are using market conditions to their advantage to negotiate lower selling prices with sellers," said David Marshall, business analyst with ESPC.

Only 20.3% of homes sold during the last three months of 2012 achieved their Home Report valuation, up slightly from 18.4% a year ago.

Marshall added: “Sellers coming to the market today are generally more accepting of this situation than was the case a year or two ago. For example, during the first half of 2010 almost 20% of sellers opted to set their initial asking price above the Home Report valuation. More recently just 1.1% of new properties marketed have had an asking price in excess of the valuation and this greater realism from sellers has helped stimulate sales."

Prices didn't fall across the board. West Lothian saw a large rise in the average house price – a 9.3% increase taking the average from £142,359 during the last three months of 2011 to £155,590 in 2012.

The ESPC says that this increase came on the back of a fall of 11.1% a year ago though "meaning that house prices had simply been brought back in line with 2010 levels".

David Marshall said that the homes sales numbers is "still relatively low" compared to pre-credit crunch levels, which can lead to some volatility in regional house prices if there is a change in the mix of properties selling.

“At the end of 2011, smaller properties accounted for a higher proportion of sales in West Lothian than would normally be seen which brought the average house price down. The increase here simply reflects the mix of properties selling in the area returning to more normal levels," said Marshall.

“Similarly, the rise of 10.2% that we’ve seen in the average house price in Dunfermline is due to an increase in the number of larger properties selling. Properties with three or more bedrooms accounted for 65% of sales in the town during the last three months of 2012 compared to 58% in 2011 and this obviously pushes the overall average up. When you compare like for like sales of properties of similar size though, house prices in the town are almost unchanged over the last year.”