ESPC House Price Report October 2016
Sales volumes decrease due to a shortage of homes on the market
- The number of homes sold in east central Scotland between August and October of 2016 decreased by 14.9% annually.
- The average selling price in east central Scotland between August and October of this year has increased by 5% when compared with the same period last year.
- The percentage of sales achieving or exceeding their Home Report valuation rose from 58.9% between August and October of 2015 to 66.7% in 2016. In Edinburgh, 73.3% of sales met or exceeded their home report valuation in the current reporting period.
- The median selling time in east central Scotland is 31.3% faster when compared to the same three-month period a year ago – from 37 days down to 25 days.
- 82.5% of properties listed between August and October 2016 were marketed as ‘offers over’, compared with 69.3% in 2015.
The number of properties sold in east central Scotland continues to fall, according to the latest analysis from ESPC, the leading property experts in the region.
Over the last three months, from August to October, sales volumes have decreased by 14.9% when compared to the same period last year. This reveals a continued slow down over recent months, with an 8.1% decrease in sold properties in the August house report and a 10.7% decrease in the September house price report.
This 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% less properties have been registered for sale, compared with the same period last year. This decline could be attributed to the supplementary 3% 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 we have 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.
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%, and for three bedroom houses in Currie and Balerno, up by 18.6% 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% and two bedroom flats are up by 7.2% year on year. As landlord purchasing new buy-to-lets must now face the 3% 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 says: “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% 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% 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.”
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