House prices in East Central Scotland fell in most areas during the last three months of 2010…
- In Edinburgh the average house price stood at £213,685 – down 2% from £218,043 in the fourth quarter of 2009.
- The average price of a one-bedroom flat in Gorgie and Dalry dipped below £100,000 for the first time since the fourth quarter of 2005.
- The number of completed sales also fell – down 13% in Edinburgh – reflecting the cooling in demand seen at the end of the year.
- Midlothian was the only area in East Central Scotland to see an annual rise in the average house price – a 2.4% increase taking the average to £168,345.
- With demand still constrained, prices are likely to ease back further during the first half of 2011 with house values returning to levels seen in early 2010.
The latest figures from market leader ESPC reveal house prices in most areas across East Central Scotland fell during the last three months of 2010. An annual decline of 2% in Edinburgh took the average house price in the City to £213,685. East Lothian and West Lothian saw annual drops of 5.6% and 9.7% respectively whilst in Dunfermline a year-on-year fall of 4.2% took the average house price to £125,000. Midlothian was the only area to observe an annual increase with a 2.4% rise bringing the average to £168,345.
The number of homes sold across East Central Scotland during the fourth quarter of 2010 was lower than during the same period in 2009. ESPC recorded a total of 1,655 from October to December – down from 1,899 the previous year. This marked the first annual fall in sales since the third quarter of 2009.
David Marshall, business analyst with ESPC, said: “Earlier in 2010 we saw the average house price rise quite sharply but much of that growth was predicated on higher demand for family housing which meant that larger homes accounted for a greater proportion of sales than in previous years. Demand for smaller properties was well below what would be considered normal levels, with first-time buyers still facing difficulties in securing mortgages and activity amongst buy-to-let investors still low.
Ultimately no area of the market can operate in complete isolation so the difficulties towards the lower end of the property market naturally have a knock-on effect further up the ladder. The number of homes available for sale is higher than would normally be seen at this time of year while the number of active buyers is still comparatively low so the market is definitely tougher for sellers than it was twelve months ago.
There is likely to be some volatility in figures from month-to-month but overall we expect the average house price in most areas to fall back to levels seen early last year during the first half of 2011. Continued low interest rates mean the number of distressed sales should remain relatively small which makes more significant falls unlikely and prices should level off later in the year. With that said, the balance of power in the market is likely to remain in favour of the buyer for much of 2011.”