HOUSE prices in Edinburgh and the Lothians continued to fall last month – dispelling the belief that property in the capital is immune to the downturn.
The average price of a house in the capital fell by 7 per cent in September – following a 6 per cent year-on-year fall in August – the first drop since 1971.
New quarterly figures show estate agents are selling fewer than half the number of hom
es they did a year ago – with many of those sold going for considerably less than expected.
The latest figures, released by the ESPC, show average house prices in central and eastern Scotland have fallen by 1.2 per cent over the past three months as low consumer confidence and caution from mortgage lenders begins to take a toll. The average selling price of a home in Edinburgh is now £219,345 compared with £221,986 last year. Prices in the city centre, Gorgie/Dalry, Leith Walk and Stockbridge have all fallen.
The suburbs have been less affected – the average price for a four-bedroomed house has risen 20.9 per cent and a three-bedroomed semi has edged up by 0.6 per cent.
In East Lothian, the average house price has fallen by 11.1 per cent on the same period last year. Midlothian has seen a drop of 11.7 per cent, Dunfermline a drop of 9.5 per cent and Falkirk a drop of 18.2 per cent. Only West Lothian has seen a year-on-year increase in the average property price, up 2.5 per cent on the same quarter last year.
In Edinburgh, estate agents have reported a drop of 57.2 in the volume of trade and a drop of 57.8 in the value of trade over the past quarter.
Some 70 per cent of people buying a fixed-price property have secured a deal for less than the asking price – only 37.5 per cent paid less than the asking price in the same quarter of last year.
Ron Smith, the chief executive of ESPC, said
estate agents were hopeful that falling prices would tempt buyers back into the market – but he said prices would be unlikely to rise until next year. "As prices come down, we would expect to see some buyers attracted back to the market, resulting in the number of sales picking up slightly toward the end of the year.
"However, tightened lending criteria will continue to exert a downward pressure on demand, meaning active buyers who can secure financing will be able to continue negotiating better deals for themselves. We would not expect to see the average price rise again over the coming year."
Sarah Speirs, of the Royal Institution of Chartered Surveyors in Scotland, said prices in Edinburgh were performing well compared with England – but she said there was a need for lenders to encourage first-time buyers.
She added: "Scotland's housing market is still fighting hard against the credit crunch and is generally in a healthier state than south of the Border. The real problem is the lack of mortgages available and until lenders are able to loosen their purse strings, there will be a shortage of buyers.
"Buyers need to be more realistic about what they can afford and sellers need to be more realistic about the price their property can achieve. Canny cash buyers can take advantage of the slow market and snap up a bargain."
The full article contains 583 words and appears in The Scotsman newspaper.
