As outlined in my Property Predictions for Scotland 2023 blog, the residential housing sector hasn’t been immune to the challenging headwinds faced by us all since the autumn of last year. Cost of living, soaring energy prices, increased mortgage rates and inflation have impacted the market.
In my opinion, while corrections in the market won’t see Edinburgh escape the predicted nationwide ‘softening’ of house prices, sellers can take heart from the findings of the Registers of Scotland House Price Index (Nov 2022) in which Scotland’s capital city remains the highest-priced area to purchase a property.
With the index reporting an average sale price of £334,113 Edinburgh undoubtedly remains a highly desirable city for many people. Throughout 2023, I envisage little change in the continuing high demand for quality detached family homes that are in particular short supply across the city. In addition, I anticipate many properties will continue to sell significantly over the Home Report valuation.
However, affordability may continue to be an issue for first-time buyers as mortgage rates have risen over the past 6 months, making securing that first step onto the already competitive Edinburgh housing market fairly challenging.
WHAT ARE THE AVERAGE HOUSE PRICES IN EDINBURGH?
The latest data available from the Registers of Scotland House Price Index (Nov 2022) reveals that the average price of a property in Scotland in November 2022 was £191,492, an increase of 5.5 per cent on November 2021.
However, take note that compared to the previous month, house prices in Scotland also decreased by 1.2% between October 2022 and November 2022. Certainly, I envisage we will see a slight downward adjustment in average house prices in the coming months – albeit I also believe that the Edinburgh market for sales of property will continue to be strong due to demand outstripping supply.
Within Edinburgh postcode areas, in my experience, many properties continue to sell within three weeks of coming on the market and achieving over the Home Report valuation.
For example, in the cosmopolitan city centre area of Comely Bank, industry statistics for the 3-month period to September 2022 reveal that in excess of 105% of the Home Report valuation was achieved and with average selling prices over £350,000. A two-bedroom flat is the most sought property type in that area and notably the Canongate area reflects a similar pricing landscape. By contrast, just three miles south in Fountainbridge one bedroom flats are more popular and command an average selling price of just over £250,000.
As in recent years, popular first-time buyer areas in Edinburgh continue to include Abbeyhill and Meadowbank. Last year both of these areas recorded strong hikes of over 15% in average prices with one-bedroom flats increasing in value to sell for an average of just under £190,000.
Consequently, while sale prices will stabilise in 2023, it’s clear that it rewards you – if a potential home buyer – to think carefully about where you wish to live in Edinburgh and your budget.
Buyers who seek more space will increasingly eye properties further (4-7 miles) from the city centre.
For example, the easily commutable SW Edinburgh corridor includes the former mill village of Juniper Green and the nearby villages of Currie and Balerno. Though as a seller you can expect to secure over your Home Report valuation in all of these areas, further analysis suggests two-bedroom houses are more popular in Juniper Green and Baberton while 3-bedroom houses may continue being in greater demand in Currie and Balerno.
Though prices may stabilise this year, bear in mind that the appeal of the villages of Juniper Green and Balerno may reflect their higher average selling prices (September 2022) of over £345,000 and £380,000 respectively.
EDINBURGH PROPERTY MARKET PREDICTIONS: WHAT TO EXPECT IN 2023
- The appeal of Scotland’s capital city as a desirable place to live and work will see both the inner city and many suburbs of Edinburgh achieve at least modest property sales in 2023.
- Despite an anticipated slow down in the Scottish property market – potentially favouring the buyer – I envisage many sales in Edinburgh will continue to be in excess of the Home Report valuation.
- As families seek more outdoor space and many businesses offer their employees the chance to work at least part of the week from home, there will continue to be a demand for quality detached family homes in Edinburgh’s suburbs. Property sales in this part of the market are likely to be quick and competitive.
- Higher mortgage rates may prove challenging for some first-time buyers, but due to changes in the letting market, Edinburgh may see more one and two bedroom flats come up for sale.
GET A HOME REPORT FROM THE HOME REPORT COMPANY
Statistics can always be fickle and while the prices within the Scottish property market are likely to vary throughout this year, it’s always worth being prepared as a seller or a buyer. Getting a Home Report early is the ideal way to prepare and avoid any sudden surprises. Read our expert guide to learn more about Home Reports and what documents are included.
If you have any questions about buying or selling property or would like to ask us for more information give us a call 0131 608 0175 or email info@homereportcompany.co.uk
