- Premiums soften as Home Report values catch up
Once again, there has been an increase in the number of residential properties coming to the market in Edinburgh, up 10.5% from the first quarter of 2018, with sales volume up by 3.3%. This is a trend we have seen over the last few years with average house prices continuing to grow (up 2.1% compared to the same quarter last year), despite continued political uncertainty – showing just how resilient the Edinburgh market is.
The biggest change we have seen is at the top end of the market (£1m+), which saw its highest level of activity in a decade – up by a whopping 25%. Since the recession of 2008 and introduction of LBTT in 2015, this has been the most affected area of the Edinburgh market so it’s great to see such positively at this top end, albeit the figures are a bit skewed from an unprecedented number of high end new build sales in developments such as Donaldsons, Craighouse and Quartermile.
Despite house prices increasing, the gap between Home Report values and sale prices is closing. Average premiums over Home Report this quarter have been just 3.5% compared to 5.1% this time last year. Some might say this is because of political uncertainty, a reduction in closing dates (down 4%), or more supply, but the reality is that prices have increased to a point where surveyors have more than enough comparable evidence to justify higher valuations. After all the Home Report valuation is what the surveyor expects the property to sell for on the open market.
So what is expected for the rest of 2019? We believe the imbalance of supply and demand to start narrowing, resulting in lower premiums being paid at closing dates with more stock being available. However, we expect sale prices to continue to increase, but perhaps not at the rate of the previous 2 years. Political uncertainty hasn’t had a major effect in Edinburgh so far and we do not expect this will change – happily Edinburgh continues to be a highly desirable place to live with a unique sales market.
Graham + Sibbald has had a very positive 2019 to date and we anticipate this is to continue. For any further information or advice, or indeed if you are considering selling your home and require a Home Report, then please contact our Edinburgh office on 0131 225 1559 where one of our surveyors will be more than happy to help.