Eastern sales volumes decrease due to a shortage of homes on the market - ESPC

Over the last three months, from August to October, sales volumes have decreased by 14.9 per cent when compared to the same period last year, the estate agent said.

This reveals a continued slow down over recent months, with an 8.1 per cent decrease in sold properties in the August house report and a 10.7 per cent decrease in ESPC’s September house price report.

The decline in sales is linked with a continued decrease in the number of properties coming to market. Over the last three month period, 9.2 per cent less properties have been registered for sale, compared with the same period last year.

This could be attributed to the supplementary 3 per cent tax on second homes introduced in April this year, which appears to be stalling the market. Sellers who wish to buy a property before selling their existing property face paying this tax, and this adds an extra expense to be considered.

While ESPC said it has seen over the last year that it is taking less and less time to sell a property, the average time to sell has crept back up, from an average 21 days between June and August this year, to an average 25 days from August to October, in line with seasonal trends. However, the time to sell has come down from 37 days when compared to the same three-month period last year.

However, the estate agent said demand for properties is still there, which is evident with the average increase in selling prices, particularly for two bedroom flats in Morningside and Merchiston, up by almost 19 per cent, and for three bedroom flats in Currie and Balerno, up by 18.6 per cent year on year.

The latest Citylets report has shown that rents are also increasing over the last three months when compared to the same period last year. One bedroom flats in Edinburgh are up by 9.6 per cent and two bedroom flats are up by 7.2 per cent year on year. As landlord purchasing new buy-to-lets must now face the 3 per cent supplement, it is likely that this will be compounded onto rent. It also demonstrates that demand is still there in Edinburgh’s rental market.

ESPC business analyst Maria Botha-Lopez said: “We have seen over the last three months that there is a more pronounced shortage of homes, and anecdotal feedback from solicitor estate agents is pointing to the 3 per cent LBTT Additional Dwelling Supplement as potentially stifling the market.

“As supply continues to drop, it creates a greater demand on the properties coming to market. Average selling prices continue to rise, with a 5 per cent increase in prices across east central Scotland. All the indicators of a seller’s market are still in place, and hopefully the traditional seasonal upturn in properties coming to market after the holidays will provide suitable options for would-be sellers to continue their journey along the property ladder.”