ESPC House Price Report - May 2024

Property Market Data - Key Points:

• The average selling price of property in Edinburgh, the Lothians, Fife and the Borders rose 1% year-on-year, to £275,170.
• Sales volumes rose 11.3% annually, while new properties coming onto the market were up 19.2% compared to March-May 2023.
• Properties attained 102.1% of their Home Report valuation on average.
• 27 days was the median time for properties to go under offer, three days slower than March-May 2023.
• 22.1% of properties for sale went to a closing date, down from 25.1% the previous year.

ESPC’S CEO, Paul Hilton, talks us through the latest developments in the property market across Edinburgh, the Lothians, Fife and the Borders, looking at the three months of March-May 2024.

“Over the last three months, the average property selling price across Edinburgh, the Lothians, Fife and the Borders was £275,170, which is exactly 1% higher than the average price at the same time last year. It’s a small increase that reflects the market conditions we’re seeing, offering sellers a small uplift on their property value, while remaining somewhat manageable for buyers to keep up with in an otherwise challenging financial climate.

“If we look at specific market areas however, the landscape is changeable and all comes down to rising demand in some areas, with others experiencing a calmer market in comparison to recent times. In East Fife, for example, average selling prices rose 4.2% year-on-year and East Lothian experienced a 3.4% rise, but by contrast, the Borders’ average selling price declined 1.4%, and Midlothian saw a decrease of 2.1%. Factors including changing lifestyles, commutes, availability of stock and even the recently released school league tables can all impact average selling prices, which of course factor in how much a buyer would pay over the property’s official Home Report valuation. We can see from the latest data that at the moment, it appears that demand is high for a coastal lifestyle, which will encourage buyers to pay premiums to secure a property that meets their requirements.

“When we discuss property prices, we’re also talking about the perceived value of a property alongside its official Home Report valuation, and this can ebb and flow over time, as we’ve seen in recent years. We’re in quite a different position to two or three years ago, when properties were regularly achieving upwards of 10-15% over their valuation figures: during March-May 2024, 72.1% of homes sold for at least their Home Report valuation, down from 78.1% last year, which means that increasing numbers of buyers were able to snap up a property without paying a significant premium.

“Where properties did sell for more than the Home Report valuation (which was the case in the vast majority), buyers paid an average of 102.1% of that figure, which is down 0.9 percentage points on last year. In fact, every area across Edinburgh, the Lothians, Fife and the Borders saw a decline overall in the premiums that buyers were willing or able to pay, with the exception of East Lothian, where the average rose 1%, meaning properties achieved 105.4% of their Home Report valuation overall.

“As you would expect to see, this amount varies significantly depending on the area, the property type and the current climate for buyers or homeowners. For instance, post-pandemic there was a huge surge of demand for rural or coastal properties, with buyers then having to bid significantly over valuation to secure a property, but in years prior to that, demand had been heavily focused on city-centre properties. In this month’s figures, we can see that there was a jump in popularity for two-bedroom flats in the New Town and West End of Edinburgh, with buyers paying 104% of Home Report valuation – that’s 4.6 percentage points more than the same time last year, when buyers paid 99.4% on average. In a clear signal of how a competitive market affects buyers’ bids, especially in areas that are ‘hot property’, it’s a different story for one-bedroom flats in the typically first-time buyer-friendly areas of Abbeyhill and Meadowbank, where buyers paid 4.7 percentage points less (now bidding 101.2% of valuation on average), and around Leith Walk and Easter Road, where successful bids averaged at exactly the Home Report valuation – 5.1 percentage points less than March-May 2023, meaning new buyers are more successful in securing homes very close to the valuation figure in these areas.

“Some areas did still see incredibly high demand to secure a home; in Musselburgh, homes achieved 114.8% of the Home Report valuation on average, so this is an area to certainly keep an eye on if you’re thinking of buying or selling there.

“If we take a closer look at the market conditions, we can see that the months of March-May appeared to present a healthy level of both new property listings, and property sales. New property listings rose by 19.2% year-on-year, while property sales volumes were up 11.3%, showing that there continues to be high levels of stock becoming available for buyers in a position to proceed. This does make a slightly more competitive market for sellers, but this is a continuation of a trend we have seen developing throughout 2024 so far, with sellers well aware of the market and feeling confident in listing their homes despite competition for attention.

“As we can predict with almost certainty by this point, yet again two-bedroom flats in Leith were the most popular property type to sell, closely followed by one-bedroom flats in the same area. Leith shows no signs of waning in popularity – in fact, the sales volumes of one-bed flats in the area rose 50% year-on-year, showing how high in demand this neighbourhood continues to be with first-time buyers.

“The speed of sale is another important factor to consider when looking at the overall market conditions, with the levels of new property listings playing into this. It’s not unexpected to see that, with so many more properties coming onto the market, selling times slow down as buyers enjoy more time to view the increasing numbers of properties available to them. During March-May, the median selling time of property was 27 days, which is three days slower than last year but still shows that generally, homes are selling within a month of going onto the market, which is a healthy pace for buyers and sellers. However, of course, there’s much variation if we look across Edinburgh, the Lothians, Fife and the Borders. Selkirk, in the Scottish Borders, boasted the fastest-selling properties, with homes going under offer in just eight days. In Edinburgh, homes in the highly-sought-after East of the city had a selling time of 19 days, but for those buyers looking for a two-bedroom house in Dunfermline, they only had around ten days to snap them up before going under offer.

“Closing dates are a good indicator of how the market performs in each individual area, as we can gauge the general levels of demand – although of course, this can be affected by an especially outstanding property generating huge levels of interest in any given area. Over the past few months, we’ve seen rates of closing dates fall in correlation to the rising volumes of properties coming onto the market, and this is once again the case in our latest figures. Across the board, 22.1% of homes had a closing date set, which is 3% less than the same time last year but is very indicative of the current market. Clermiston, in the north of Edinburgh, and Jedburgh in the Scottish Borders were both highly popular with buyers – 50% of properties for sale in these locations set closing dates during the last three months.

“Overall, the market throughout March-May offers much to be positive about, despite there being some challenges ongoing for both buyers and sellers. As ever, I would always recommend speaking to your local ESPC solicitor estate agent if you’re thinking of buying or selling a home in Edinburgh, the Lothians, Fife and the Borders, to get the most up-to-date and informed local knowledge and advice.”

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