Demand remains robust as house price growth moderates in Edinburgh
Price growth in the buoyant Edinburgh market has moderated as some potential buyers and vendors tread water awaiting political clarity.
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Annual price growth in Edinburgh slowed to 4.3% in June, down from 7.6% at the end of Q1 and from more than 10% at the end of 2018.
A moderation in property values is a sign that, having appeared relatively unaffected by the political uncertainty which has been impacting other prime regional markets since 2016, both buyers and sellers in the city are becoming more cautious.
The data indicates that some vendors are in no rush to sell. The number of new listings across the whole market in Edinburgh was 15% lower in the second quarter of 2019 compared to the same period in 2018 and the figure was 20% lower than in 2017.
The decline was slightly less marked at the top end of the market which reflects the strong performance seen over the past 12 months, with a 12% decline in new listings above £500,000 in the second quarter compared with 2018.
Whilst a fall in the number of homes being brought to market has helped underpin values at all levels of the market, a further extension to the current political uncertainty – with the date of the UK’s departure from the EU already having been rescheduled twice – has resulted in some buyers choosing to put decisions on hold until there is more clarity.
Consequently, there has also been a slight uptick in transaction times, with the length of time taken between a property first being launched and initially going under offer lengthening by 5.6% – or 56 days – so far this year compared with 2018, according to data across the whole Edinburgh market.
Yet agents report that properties that are priced to reflect current market conditions continue to attract buyers. The number of offers accepted between January and June 2019 was 7.7% higher year-on-year, according to Knight Frank figures, while exchanges were also up – buoyed by a strong start to the year in the new homes market.
In particular, demand for family houses outside of the city centre has been robust, especially in traditionally popular areas such as Murrayfield, Morningside and Newington. This is reflected in pricing, with our index showing that, on average, values for houses rose 5.5% in the year to June, compared with growth of 2.4% for flats.
If you’re looking for further research or information please contact Oliver Knight, or Edward Douglas-Home for property advice.