CERTAINLY with the country in the grip of a credit crunch – and seemingly heading towards a recession – it is no surprise that the traditionally strong housing market is showing signs of wobbling.
With mortgages harder to come by, particularly for first-time buyers and those with little equity, it was to be expected that in the present economic climate the market favours the buyer.
The latest statistics issued today by the Edinburgh Solic
itors Property Centre reflect this, showing that in the last quarter the number of homes changing hands has fallen by one third – reflecting the lack of confidence the public has in the prospects for the economy in the short term at least. And with interest rates expected to rise again before the end of the year there seems little prospect of the market heating up again in the foreseeable future
But it is not all doom and gloom. The massive losses in property values that have been so evident in other parts of the UK – particularly in the south-east of England, where prices have fallen by up to one third– have not yet manifested themselves in the region. In fact, Lothian appears to be doing more than just weathering the storm with figures showing average prices are still growing, albeit at a modest three per cent.
But there are worrying signs that, with 6000 properties currently on the market, homes are not moving as quickly as they have in the past. Despite the possibility of securing a bargain, the inability of would-be buyers to raise the necessary funds at the lower end of the market is causing a ripple effect which appears to be affecting both the middle and top-end sectors.
There is also worrying evidence of a continuing drift out of the city into the suburbs which offer better value for money and prices continue to increase at levels achieved in previous years.
One of the main reasons Edinburgh continues to shelter in the lea of the storm is largely due to its strong economy. The recent Hacker Young report indicated that the city had the strongest economy of any UK city – including London – with each citizen contributing more than £28,000 per head, seven per cent higher than the UK average.
World-class companies, a highly skilled labour force combined with a willingness by both international and local investors to fund new wealth- creation projects continue to give us an edge over many of our rivals. It is vital for the Capital, and for Scotland, that this impetus is maintained and that the Government continues to lend its support.
For although the Capital appears generally to be weathering the storm better than other cities and parts of the country, there is no room for complacency. Things could still get a whole lot worse before they get better.
The full article contains 483 words and appears in Edinburgh Evening News newspaper.
