ESPC House Price Report - February 2013

• In the three months to February the average house price in Edinburgh was £191,623 – down 5.0% annually.
• There was a mixed picture for house prices within the Capital. Larger properties generally saw prices rise while values of smaller homes were lower than they were a year ago.
• In East Lothian the average house price rose sharply, but this increase was fuelled by a rise in the number of larger homes selling.
• 83.9% of homes sold between December and February were secured for less than their Home Report valuation, down slightly from 85.9% a year ago.
• On average, buyers paid 6.3% below Home Report valuation in the three months to February 2012.

The average house price in Edinburgh between December 2012 and February 2013 stood at £191,623. This represents a year-on-year decrease of 5.0% and marks the seventh consecutive period during which the average house price in the Capital has fallen on an annual basis.

There was a mixed picture for house prices within the Capital, with the value of larger properties rising whilst the value of smaller properties declined in most areas. For example, the average price of a three bedroom semi-detached property on the outskirts of the city rose by 8.5% annually to £232,306. By contrast the average price of a one bedroom flat in Leith Walk and Easter Road fell by 16.4% annually and now stands at £89,326.

Commenting on the results David Marshall, business analyst with ESPC said: "You tend to see some volatility in prices at a local level from one period to the next and certainly I wouldn’t anticipate that we’ll see such a sharp rate of change in either case continuing over a prolonged period of time. That said, the market for family homes has generally been more robust than that for smaller properties over the last couple of years. We’ve started to see more first time buyers and buy-to-let investors returning to the market but in most cases they’re looking to negotiate reasonable discounts from sellers. As a result, while the number of sales of smaller homes has risen this hasn’t been matched by an increase in prices."

In East Lothian the average house price rose by 17.4% annually from £182,300 to £214,037. The rise was primarily driven by an increase in the proportion of larger properties rather than an increase in values. In the three months to February this year properties with four or more bedrooms accounted for 27% of homes sold in the area, up from 20% a year ago. West Lothian also saw a sharp rise (17.4%) in the average house price however this came on the back of a similarly sharp decline (26.6%) a year ago.

There was a slight decrease in the percentage of sales where properties were secured for less than their Home Report valuation but in most cases buyers are still enjoying success in negotiating discounts. 83.9% of properties sold between December 2012 and February 2013 were secured for less than their Home Report valuation, down slightly from 85.9% during the same period a year ago. On average, buyers paid 6.3% below the Home Report valuation to secure a home in the three months to February.

David Marshall said: "Although the number of homes selling has been rising over the last 12 months market conditions continue to favour buyers which is why we’re still seeing a majority of homes selling for less than their valuation. Sellers coming to the market today are increasingly aware of this situation, with almost half of the properties brought to the market so far this year having an initial asking price lower than the Home Report valuation."

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