Are first-time buyers leaving Edinburgh to afford a home?
Key Takeaways
- Despite rising Edinburgh house prices, recent research suggests first-time buyers are not leaving the Capital in particularly large numbers to find more affordable homes.
- Sales of one- and two-bedroom flats increased in several Edinburgh first-time buyer hotspots, including Abbeyhill, Inverleith, Leith Walk and Leith Links.
- Commuter towns have seen mixed demand, with starter-flat sales falling 21% in Musselburgh but rising 10% in Bonnyrigg over the period examined.
- Dunfermline remains considerably more affordable, with an average starter-home selling price of £134,240, but sales volumes have changed by just 0.6% over the past three years.
- The research suggests location remains a major priority for many first-time buyers, with areas such as Gorgie and Dalry also recording a 4% rise in sales.
Paul Hilton, CEO of ESPC, shares whether first-time buyers in Edinburgh are having to leave the Capital to get onto the property ladder.
With rising house prices across the board, and especially in Edinburgh (ESPC’s latest House Price Report shows the city’s average selling prices rose again during August, by 1% to £317,070), it would be a safe assumption that first-time buyers might be exiting the Capital in order to take that crucial first step onto the property ladder.
This especially feels like the case when we know that over the last few years, commuter-friendly towns near Edinburgh such as Musselburgh and Bonnyrigg, and the city of Dunfermline, have seen many buyers relocating there in order to afford that next step up on the ladder, sacrificing a central location for additional space.
Are first-time buyers leaving Edinburgh to find affordable homes?
But is it actually the case that first-time buyers are leaving Edinburgh because of affordability pressures? According to our recent research, perhaps not.
We examined the sales of one- and two-bedroom flats in Edinburgh’s traditionally prime first-time buyer hotspots, covering neighbourhoods such as Leith and its surrounding areas, Stockbridge, Abbeyhill, Bruntsfield, Newington and Portobello, and compared them to sales of similar properties in these popular commuter towns, to see if there really has been a shift in first-time buyers relocating outside Edinburgh.
The results were surprising: headlines would have you believe that house prices in Edinburgh are so unaffordable that first-time buyers would have no choice but to exit the city to secure a home of their own, but the figures tell a different story.
In fact, the story I see is one where first-time buyers will sacrifice space, or save for longer if they need to, to make it possible to buy a home in Edinburgh in their ideal location. They aren’t willing to compromise when it comes to where they live.
Where are Edinburgh first-time buyers buying?
Sales of one- and two-bed flats in Abbeyhill rose 9% year-over-year, and in leafy Inverleith, there was a 19% increase in the number of starter homes sold.
Those figures jump a lot higher when you shift eastwards to Leith: sales around Leith Walk rose 61%, while around Leith Links, it was 64%, indicating that first-time buyers were still hunting for flats for sale in Leith in their droves.
Some areas did see a stark dip in sales volumes, such as around Easter Road, where sales were down by 18% annually, or in Stockbridge, where the figure lay at 27%.
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How do Edinburgh property prices compare with commuter towns?
By comparison, sales of one- and two-bedroom flats in Musselburgh declined 21% over the same period.
However, Bonnyrigg saw sales volumes rise by a healthy 10% for the same type of property, so this area may well be seeing increasing interest from buyers looking to get a bit more for their money.
Overall, it doesn’t appear that affordability pressure has skipped these out-of-town locations, as property prices in commuter towns have continued to rise there too, meaning that buyers face the choice of buying a slightly cheaper property with a more expensive commute (Bonnyrigg hovers around £170,000 on average) or paying a higher purchase price for a more centrally located home.
Of course, you may get more for your money outside of the city in terms of a property’s proportions and overall condition, or added bonuses like gardens or parking spaces, but perhaps that isn’t as important to many young buyers as being in their favourite neighbourhoods in and around the city centre.
Interestingly, Dunfermline is considerably more affordable than any of the other areas in consideration, with an average selling price of £134,240 for a starter home (almost £100,000 cheaper than the equivalent property in Abbeyhill or Leith, and significantly cheaper than homes in Stockbridge, Inverleith and Bruntsfield, where properties can cost double this for a flat of the same size), but sales volumes have barely shifted, with a rise of less than 1% (0.6%) over the past three years.
Is Edinburgh still the goal for first-time buyers?
So, wherever buyers are buying, it doesn’t appear that they are currently relocating outside of Edinburgh in particularly large numbers – especially not when sales volumes in ‘rising star’ neighbourhoods such as Gorgie and Dalry are up 4% over the same period.
Unsurprisingly, average selling prices here sit much lower than their more established counterparts, at £190,086 – although still considerably more expensive than Bonnyrigg, and Dunfermline at least.
It seems as though, for the time being at least, it remains all about ‘location, location, location’ for buyers starting out, with Edinburgh remaining a popular choice for first-time buyers about to take the property plunge.