The number of homes sold in Edinburgh, the Lothians and Fife rocketed by 42 per cent in the three months to October, new figures have shown.
The Edinburgh Solicitors Property Centre (ESPC) said conditions were improving for sellers, but warned that the increase had come from a low base.
In its quarterly house price report, the ESPC found that more than half of homes in Edinburgh were secured for less than their home report valuation, with the figure rising to around 70 per cent in the Lothians and Fife.
“There’s been a lot of discussion recently about the upturn in the housing market and while it’s certainly true that conditions are more favourable for sellers than has been the case for some time, it’s important to keep things in perspective,” David Marshall, business analyst with ESPC, said.
“The number of homes selling has risen significantly but this improvement comes from a low base and sales are still about 25-30 per cent below peak levels.”
Although prices are higher than they were a year ago in some areas, the rate of growth is typically below consumer price index (CPI) inflation, the report warned. In Edinburgh, the average house price now stands at £208,886 – up 2 per cent from last year.
“Where larger increases have been observed, these generally serve to offset falls witnessed at this stage a year ago,” Mr Marshall said, pointing to a 5.6 per cent rise in average house prices in East Lothian which came after a 4.5 per cent decline last year.
The report found that the number of homes coming on to the market also increased, but at the more modest annual rate of 14.9 per cent. There was also a rise in the proportion of “offers over” prices – which end in a sealed bidding system. The approach, which regularly attracted bids of up to 30 per cent over the asking price at the height of the property boom in 2007, was all but wiped out after the recession.
“Some 44 per cent of homes brought to the market over the last three months have used this method – up from 33 per cent at this point last year,” Mr Marshall said, adding that current premiums on an average property stand at around 5 per cent.
“While there are signs that the number of transactions are increasing, it remains a buyer’s market and some sellers are making decisions to sell at a price lower than market value due to a fear of losing the sale.”
Sarah Spiers, director of the Royal Institute of Chartered Surveyors Scotland, which represents surveyors who carry out home reports, said: “As the market improves, sellers will be in a better bargaining position, whereby they will be able to resist the offers presently being submitted below perceived market value by some purchasers.
“More recently, properties have been marketed at offers over rather than a fixed price or in region of, which does tend to underline a repositioning of the market towards the seller rather than the purchaser. There is an evolving correlation between the marketing period and achieving best price. Therefore, it is important to ensure property has a realistic valuation.”