Kirsten Nicolson

As the old year slips away, home buyers and sellers – as well as property professionals – can look back on 2024 as one of those rare interludes when supply and demand came more closely into alignment, resulting in fewer dramatic ups and downs.

And, although the last month of Q4 is typically quieter than the rest of the year, transactions have still been taking place around Home Report value, with an encouraging number achieving up to 10% over, after going to very good closing dates.

Such deals remain the exception, however, and we are nowhere near the post-Covid boom period when numbers between 10% and 20% above Home Report went unremarked. Closing dates are not as common as in the past with good sales generally being driven by single buyers who come to a mutually acceptable personal arrangement with a willing seller.

There is a significant and ongoing demand for family homes, with people looking for more room and outdoor space in suburban areas close to good school and in easy-living modern developments, both inside and out of the city bypass. 

The big challenge, which is definitely throwing grit in the wheels of a more fluid market, is chains. What Scots used to view as a quaintly English phenomenon is becoming more common as buyers find they are not selling in time to commit to a purchase.

These hiccups are exacerbated by the fact that bridging finance, which used to solve this problem, is now virtually impossible to obtain, and people are being advised to not even think about concluding missives until their own are tied down and unshakeable.

The fashion for making an offer subject to the sale of your own property is not helping here, since sellers are imposing unrealistic timescales – sometimes just a number of weeks – for buyers to come up with the goods.

Flat transactions, for so long the reassuringly reliable engine of the local market, have taken a bit of a beating in the past year as buy-to-let landlords cut and run in the face of a storm of legislation which has persuaded many of them that the game is no longer worth the candle.

Concerns about tax relief and a regulatory regime which seems heavily weighted in favour of tenants will not be helped by the two per cent increase this year of Scotland’s Additional Dwelling Supplement (ADS), which now adds eight per cent to the total purchase price of extra properties.

There are exceptions, of course. ADS is not diminishing enthusiasm for upscale apartments such as those at New Eidyn, in the St James Quarter “lifestyle destination”, where cash buyers have been attracted from London and abroad as moths to a flame.

And large lateral flats in the £750,000-plus bracket, in prime Edinburgh suburbs, are seeing good business from downsizers who are selling bigger homes and still trousering a handsome profit.

But in general, there are an unusual number of empty ex-rental flats on the market, and this is likely to remain the case as building and labour costs have eroded the attraction of a “doer-upper”, and buyers now seem to sniff at anything less than move-in condition.

Joppa and Portobello, with their panoramic views across to Fife, are currently very popular, boasting solid Georgian homes, good state and private schools and access to the golf courses and attractions of East Lothian.

Gullane and North Berwick are perennially in favour. Formerly fast-moving areas such as Bruntsfield and the New Town are less so at the moment, largely because of the factors mentioned above affecting the flats market.

The most recent Office for National Statistics report puts the average price for a house in Edinburgh at £347,000 – a country mile ahead of the rest of the country and more evidence of the fact the capital remains a market unto itself.

It was to be expected this year that a General Election and a Budget would cause some jitters, and they certainly slowed Q4 of 2024 down a bit – so it could well be reasonable to look for quite a substantial bounce in the quieter political waters of 2025.

That is not to say that we will necessarily see house prices shooting up, but we can be fairly certain that they won’t be dropping.

Kirsten Nicolson is a director in the Edinburgh residential offices of DM Hall Chartered Surveyors