Blog: Edinburgh property market is gratifyingly active, but shortage of stock is still a major issue
Nick Hancock is an Associate in the Edinburgh office of DM Hall chartered surveyors
The property market in Edinburgh, as befits a world capital city, is complex, variable and full of anomalies - but what should cheer participants is that it is still active and has emerged from the doldrums of the recessionary years.
Edinburgh regularly features in “best places to live” surveys and, with its eclectic mix of housing styles, cultural riches and outstanding historic built environment, it is hardly surprising that it is in demand.
The most significant characteristic of the market at the moment is shortage of supply. Good properties are selling at closing dates within weeks of coming onto the market and they are regularly achieving prices in excess of the Home Report valuation.
There is no doubt that the level of instructions has dropped slightly, but that is to be expected at this time of the year, with people - understandably - turning their attention to well-earned summer holidays.
However, surveyors are still fairly busy, and significantly busier than in the dark days which followed the financial crisis. The market is active, but because there has not been enough stock available, it has rather spilled over into the normal summer lull.
Agents are also reporting encouraging levels of activity and are experiencing the same shortage of homes coming to market. Everything which comes to market is selling gratifyingly quickly.
The reasons for the shortage are opaque. It is perfectly reasonable to suggest, however, that people have not yet realised that values have improved and are consistently outstripping Home Report values.
Once that consciousness feeds through to the property-selling public and we get past the seasonal hiatus, the shortage may well ease substantially and there is every prospect of a steadily improving residential property market.
The advice from property professionals to sellers still is very much that they need to sell before they consider buying.
Previously, that advice was offered because homes were taking time to sell as a result of funding issues. Now, the advice is still valid because there are so few homes available and people who are looking to buy should be in a position where they at least have an accepted offer on their own property.
It is unlikely for some time that people will feel confident enough to buy properties in the expectation that they will easily be able to sell their own home. More stability is needed before that scenario returns.
In general terms, prices are still on the long, slow ascent to where there were in the pre-crash environment. However, two-bedroom modern flats with en-suites are in demand and are fetch figures which are up on the 2010, mid-crisis levels. Three-bedroom traditional Wimpey semis and modern, four-bedroom homes with a garage have not shifted greatly since 2010. Former local authority mid terraces standing at similar values.
At the upper end of the market, among the traditional stone-built three-bedroom terraces and detached stone four-bedroom homes, which Edinburgh has in abundance, prices are looking more positive.
At the moment, the level of competition means that people need to be in a good position to buy, and be ready for a tight bidding situation, but essentially what is really needed is more stock on the market to create the stability which will benefit everyone.