Shortage of good stock keeps city market bubbly

Quality can spark bids frenzy, says Nicholas Hancock

Edinburgh has always been a law unto itself in the property market, but current conditions are curious.

In terms of activity, it has been quiet with a dearth of good stock.

A consequence is that when a good home comes up frenzy ensues.

Stock has been in short supply all year, leading to regular closing dates and some pretty inflated prices.

Recent reports suggest uplifts of 20 per cent in the past three months compared to the same time in 2016.

Increasingly anxious buyers who have missed out on previous closing dates are exhibiting a tendency to throw significant amounts of money at the next one in the hope of beating off the competition.

This is an understandable strategy in such an intense contest, but such cavalier buyers might reflect that their spending could come back to bite them when it comes to their turn to sell.

The consistent theme from agents this summer is simply that they have not had enough to sell, though what they have handled has shifted handsomely.

At root, the shortage is still caused by uncertainty, a lingering hangover from the shock of Brexit – and the snap General Election this year.

This shortage becomes self-perpetuating. People don’t want to sell their own property if they can’t be sure of finding something to buy.

What we are seeing as a result of that is that new build sales are doing very well, with most sites sold out until spring next year.

Another quite visible consequence of the current market is a spate of extensions, improvements and loft conversions as an alternative to moving.

Homeowners can acquire extra space without the costs of moving, such as home reports, removals and mortgages – although they pale into insignificance beside land and buildings transaction tax.

Central Edinburgh remains prime for Scotland but other hotspots are Stockbridge, with its village feel and good schools, Bellevue and, pushing out from the New Town, Broughton.

To the south, Bruntsfield always does well and Marchmont is a great example of multiple types of occupiers, ranging from buy-to-let landlords, parents buying for student children and owner-occupiers.

A two-bedroomed flat in Marchmont with garden will need £450,000 to come out on top in a bidding war and threebedroomed tenement properties are going for up to half a million pounds.

Bungalows in districts such as Corstorphine and Willowbrae have not been transacting much but they are good family areas.

An original twobedroom, two-reception room home should sell for £310,000 to £350,000 but buyers would have to add at least £100,000 to that for an extended fourbedroom.

The upper end is still slow, though good homes will sell well.

An extended Bellevue town house on the market recently at offers over £1.4 million had no trouble in going to a closing date.

There is still a lot of new build going on, particularly on greenfield sites with proximity to the bypass. Developers with permissions are confident of selling out a long way in advance.

In this market, expect land banks to be plundered.