Price growth slows in Edinburgh’s prime property market
Price growth in the buoyant Edinburgh prime residential property market has moderated as some potential buyers and vendors tread water awaiting political clarity, according the latest city index.
Annual price growth in Edinburgh slowed to 4.3% in June, down from 7.6% at the end of the first quarter of the year and from more than 10% at the end of 2018, the data from the Knight Frank index shows.
On average, there was a 5.5% increase in values for houses in the year to June, compared with growth of 2.4% for flats and the number of offers accepted between January and June 2019 was 7.7% higher year on year.
But there was a 15% fall year on year in the number of homes newly listed for sale between January and June 2019 and an uptick in transaction times, with length of time taken between a property first being launched and initially going under offer lengthening by 5.6%.
‘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,’ said Knight Frank’s Edward Douglas-Home.
He pointed out that 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,’ Douglas-Home explained.
‘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 European Union already having been rescheduled twice, has resulted in some buyers choosing to put decisions on hold until there is more clarity,’ he said.
‘Consequently, there has also been a slight uptick in transaction times. Yet agents report that properties that are priced to reflect current market conditions continue to attract buyers while exchanges were also up, buoyed by a strong start to the year in the new homes market,’ he added.
Douglas-Home pointed out that demand for family houses outside of the city centre has been robust, especially in traditionally popular areas such as Murrayfield, Morningside and Newington.
Meanwhile country house prices in Scotland fell by 0.1% in the second quarter of 2019, the first quarterly fall in values in this market in two years while year on year they were up by 1.1%.
Modest annual increases in values were seen across the central belt, in the north and in the Borders and more generally, rural locations within commuting distance of employment hubs have been the stronger performers.
Knight Frank believes that the relative value on offer in prime Scottish markets compared to the rest of the UK should drive demand in 2019. ‘Whilst a slowing of price growth in the prime Edinburgh market is a sign that both buyers and sellers in the city have become more cautious, it remains one of the strongest prime markets tracked by Knight Frank in the UK,’ said Oliver Knight, Knight Frank residential research associate.