Surprise fall in house prices in Edinburgh

Capital only ‘high-value’ area to see values slump

PROPERTY prices in Scotland’s capital suffered a surprise drop of more than £2,100 in the year to March.

The 1.8 per cent decrease in the cost of an average house was the first time the market in Edinburgh has seen an annual decline for almost three-and-a-half years.

The fall of £2,132 in cash terms meant the city was the only ‘high-value’ area to see prices plummet, according to an index from chartered surveyors Walker Fraser Steele.

The last time annual house price growth in Edinburgh dropped was in November 2019.

At £331,500, a typical home in the city still costs considerably more than the average property in Scotland as a whole in March, £220,351. The annual decrease is being partly blamed on the sale of several high-value homes in March last year, which boosted the average.

John Tindale, a senior analyst at property data firm Acadata, said: ‘The one high-value area that has seen prices fall over the last 12 months is Edinburgh, where the average prices of all property types, except terraces, are lower than one year earlier.

‘However, looking at prices in Edinburgh in March 2022 in more detail, the bar that month was set particularly high.

‘It included the sales of Edinburgh’s highest-priced semidetached home of the year at £4million, the highest-priced flat of the year at £2.5million and the second highest-priced detached property of the year, at £3.5million. With no similar eye-watering prices occurring in March 2023, it is not so surprising the average price has fallen some 12 months later.’

Edinburgh has seen house prices rocket over recent years, but was last month overtaken by East Renfrewshire as the most expensive place to buy a home in Scotland. The area retained the top spot in March, with an average price of £342,082 following monthly growth of 3.8 per cent.

Across the country, monthly house price inflation stagnated in March, while annual growth was up 1.3 per cent on average.

Scott Jack, regional development director at Walker Fraser Steele, branded the housing market’s performance ‘remarkable’ in the face of the ‘economic headwinds’ facing the country.

He said: ‘Confidence generally in the market has held up relatively well. Sales volumes, too, are improved on February this year and are up 36 per cent.

‘The subsequent increase in demand for purchases has put the brakes on the slide in house prices that started in December 2022.’

Mr Jack added: ‘As we have noted before, the longer days of spring have traditionally seen growth in housing sales in March in Scotland and this year is no exception.

‘The affordability challenges that have deterred buyers in the first quarter of the year may be easing slightly especially for those who choose to move and take fixed rate mortgages that protect from further rises.’

‘Confidence held up relatively well’