Edinburgh’s residential property market saw higher levels of growth than any other UK city last year, a report has claimed.
The average house price in Scotland’s capital increased by 10.2 per cent in December 2017 compared to the same time the previous year, while the value of the housing stock across the city grew by £7.5 billion over the same period – more than any other Local Authority district in the UK as a whole.
However, the £2 million-plus market was at its lowest level since 2004, Savills’s Residential Property Market Report found, hit by the Land and Buildings Transaction tax (LBTT), which would see £198,000 added on to the price of a transaction at this level.
Prime transactions for property above £400,000 reached a record 1,733 in Edinburgh, 15 per cent higher than 2016. Transactions above £750,000 increased from 247 in 2016 to 274 in 2017, driven by the southern hotspots of Grange, Morningside and Merchiston, which accounted for a total of 377 transactions last year, overtaking the traditional million pound hub of the New Town.
East Lothian, however, saw the number of residential transactions rocket by 17 per cent and the Borders by 12 per cent. Faisal Choudhry, head of residential research in Scotland for Savills, said: “Scotland has witnessed its strongest market since 2007, with price growth now outperforming London. Values will continue to rise due to a lack of supply and strong city economies.
“In particular, Edinburgh’s residential market profile continues to excel. The lack of supply and strong domestic and international demand for property in the Capital is one of the main reasons behind a rise in prime values in Edinburgh City.” The number of new build transactions in Edinburgh increased by 30 per cent last year.
Some of the highest sales volumes took place in the suburban locations of Liberton and South Queensferry. However, the strongest growth in transactions last year was witnessed closer to the city centre, where experts said the redevelopment of the St James centre had attracted people towards the city centre.
Across Scotland, the million pound market was described in the report as having made “a remarkable recovery last year”, following a slow start to 2017. The high-end property market has been hit by the introduction of the LBTT in April 2015, however, Savills said the impact was beginning to lessen.
There were a total of 173 transactions of £1m-plus homes for the year as a whole with 117 taking place in second half of 2017. This compares to 167 in 2016 and 289 at the peak of the market in 2007.