Bull market most active since crash
Price of homes soars £6,000 a month in city hotspot
Edinburgh’s west end: prices soaring more than £6,000 a month
Prices of homes in an Edinburgh hotspot are rising by £6,000 a month as the country witnesses a property boom.
Homes are now changing hands in Scotland at a rate not seen since before the financial crash of 2007/08, according to a property agent.
Jacqueline Law, managing partner at Aberdein Considine, said there were 8% more transactions last year compared to the previous 12 months as prices rose in 28 of the country’s 32 local authority areas.
The “bull market” is driven by buoyancy around big cities and by a fall in the supply of property coming the market.
It is rippling out to areas which have traditionally not seen high levels of activity, such as East Ayrshire, according to the firm’s regular Property Monitor.
Just under 3,500 transactions in the last quarter were in Edinburgh, the busiest property market in Scotland, with Glasgow a close second.
For the first time, Scotland has two areas where the average home now costs more than a quarter of a million pounds.
The average price of a home in Edinburgh and East Renfrewshire now costs more than £250,000.
East Renfrewshire recorded the highest average price in Scotland, with the average sale reaching £261,512 during Q3, up 5.9% on the same time last year.
The Glasgow suburb is just ahead of Edinburgh, which saw a 6.6% average price rise to £257,220.
Two-bedroom flats in Edinburgh’s New Town and west end are now making more money per month than the average Scottish professional footballer, says Mrs Law, having shot up in value by more than £80,000 in the last year – or £6,000 a month.
A typical property in these areas of the city now costs £410,122, a year-on-year rise of 24.7%.
Perth and Kinross has enjoyed its second consecutive quarter of growth. It has followed its near 10% price increase in Q2 with another 6.1% rise this quarter and Perth’s average property is priced above £200,000 for the first time. The back-to-back increases put the average home in the region at £203,398 – overtaking Aberdeen.
Aberdeen has recorded its first year-on-year average price increase since the oil and gas downturn three years ago in a further sign that the economy in the north-east is beginning to improve.
Neighbouring Aberdeenshire also enjoyed an increase in sale volumes for consecutive quarters, following up a 3% rise in volumes in the second quarter with a 5.7% increase in Q3.
Across Aberdeen and Aberdeenshire combined the third quarter saw a 2% increase in the volume of sales compared to the same period last year.
More than 2,100 properties were sold, including more above £500,000. However, volume increases have yet to influence the average price of property in the region, with Aberdeen static (up 0.1% to £200,832) and Aberdeenshire seeing a 1.9% fall to £209,922.
West Lothian, which has had a sluggish start to the year, saw a 10% rise in sales in the third quarter.
The Property Monitor – which includes independent market research – reports continued difficulty in selling properties in the higher-priced brackets, stating that this is “due to the level of tax levied by the Scottish Government.”
also reveals concerns about the Scottish Government’s second home levy, known as the Additional Dwelling Supplement (ADS).
The tax, brought in by the then Finance Secretary John Swinney in 2016, charges an additional 3% levy on buy-to-let properties worth more than £40,000, on top of any other Land and Buildings Transaction Tax due. The changes added an additional £6,000 tax to the purchase of a second property at £200,000.
More than six in ten people polled by Aberdein Considine said the additional tax has put them off investing in a second property.
Mrs Law added: “This is consistent with the attitudes we’re seeing on the ground across our 19 offices and is what the tax was designed to do.
“However, the private rented sector meets a significant portion of Scotland’s housing needs.
“If future landlords are being driven away, the government will need to match its appetite for additional taxation with similar vigour for house building – because the housing need is not going to go away.”