Rising demand from buyers has helped drive prices up and in popular areas such as the New Town and the West End of the city prices increased by 1.5% in the first three months of the year.
The data also shows a 47% increase in applicant numbers in the first quarter of 2014, year on year and Edinburgh accounted for 59% of all £1 million plus property sales in Scotland in 2013.
It is the fourth quarter in a row that property prices in Edinburgh have increased and the Knight Frank report says that the city’s property market has been in recovery mode since spring 2013 with transactions and interest among buyers picking up noticeably over the autumn and winter months.
It points out that this increase in activity has been taking place alongside a wider economic revival in Edinburgh, with the city coming second only to London for jobs growth since 2010, according to a recent analysis by the Centre for Cities.
The number of new applicants who registered their interest in buying a new home in the three months to March 2014 was 47% higher than the same period last year, while the number of viewings conducted was up by 66% over the same period. However, stock levels remain low.
Much of this demand has been focused on the New Town and West End areas of the city, where property prices increased by 1.5% between January and March, the strongest growth of all the regions covered by the index.
In the south of the city, demand for family homes, combined with a more general lack of stock across the market, contributed to a 1.3% rise in prices in the first quarter of 2014. This area is supported by good schools and excellent transport links to the centre of the city.
‘There is a lack of good quality stock coming to the market, with many vendors cautious about putting their home on the market before the Independence Referendum in September,’ said Edward Douglas-Home, head of Edinburgh City Sales.
‘However, our analysis suggests that this caution may be misplaced, with the number of new applicants registering their interest in buying a home up significantly so far this year and the number of transactions completed in the three months to March more than double that of the same three month period last year,’ he explained.
‘While demand continues to rise and our database of buyers lengthens, there is a misconception among potential sellers that the referendum makes 2014 the wrong time to sell. The risk that some home owners may run is that following the referendum in September, there could be a flood of stock on the market which will reduce the likelihood of achieving the best possible result,’ he pointed out.
‘While the balance is tipped in favour of the seller, we would encourage potential vendors to consider coming to the market this spring and to make hay while the sun shines,’ he added.
Indeed, the question mark over whether Scotland will remain part of the UK following the Referendum in September 2014 does not seem to be having an impact on buyers. The total number of individuals searching for property in Edinburgh on Knight Frank’s Global Property Search website in 2013 was 45% higher than a year previously.
Excluding searches from within the UK, web traffic was 65% higher over the same period, highlighting the city’s international appeal.
The number of million pound sales in Edinburgh picked up over the course of last year, with 20 such transactions in the final three months of 2013, according to data provided by the Registers of Scotland.
The city is the traditional hub of the prime market in Scotland and last year accounted for 59% of all £1 million plus transactions. The index report says that while the £1 million plus market continues to recover, driven in part by increasing demand from both local, international and English buyers, it is important to note this sector of the market is still recovering from the impact of the financial crisis.
