ESPC House Price Report - January 2013

  • In the three months to January the average house price in Edinburgh was £202,275 - down 4.6% annually.
  • In most areas of the city there are more homes selling, but at lower prices than was the case 12 months ago.
  • In Gorgie and Dalry the average price of a one bedroom flat fell below £90,000 for the first time since 2005 and now stands at £86,025.
  • Outside Edinburgh there was significant volatility in average price figures owing to the lower number of transactions typically associated with the winter period.
  • 80.3% of properties sold in East Central Scotland over the last three months were secured for less than Home Report valuation. 23.0% of properties were bought at more than 10% below their initial Home Report valuation.

The average house price in Edinburgh between November and January stood at £202,275 - down 4.6% annually. The decrease marked the sixth consecutive period during which house prices in the Capital had fallen on an annual basis.

Within the city trends were broadly consistent with prices in most areas lower than they were a year ago. Smaller properties typically saw greater decreases in value reflecting the tougher conditions for sellers at this end of the market. In Gorgie and Dalry a decrease of 6.0% took the average selling price of a one-bedroom flat to £86,025, the first time this figure had dipped below £90,000 since 2005.

David Marshall, business analyst with ESPC, commented: "We've seen a rise in buyer activity over the last year and the number of homes selling is at its highest level since 2008. In most cases buyers are looking to negotiate lower selling prices and sellers are showing a willingness to accommodate them. As a results we're seeing more homes selling, but at lower prices.

"Roughly four out of five homes are being bought below their Home Report valuation at present, with almost one in four selling for more than 10% below valuation. Whereas you might have seen sellers a couple of years ago testing the water by setting their asking price above the valuation we're now seeing much more realism on this front. Just 1% of properties brought to the market over the last three months had an asking price in excess of the original valuation."

Outside Edinburgh there were some sharp movements in average house prices. This was the result of lower sales volumes typically associated with the winter period causing greater volatility in figures.

David Marshall explained: "Although the number of homes selling is higher than we've seen at this time of year for a long time, you always get a seasonal dip in activity over the winter months. When sales volumes are lower you'll see more volatility in average house prices as it takes a relatively small number of sales to skew figures. In West Lothian, for example the 29.3% increase this year follows a 24.0% decrease a year ago so prices are simply back in line with levels seen two years ago. Similarly, the 9.2% increase in East Lothian comes on the back of a 6.1% decrease last year. In neither case are such sharp movements reflective of long run trends."

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