City still hot property despite prices slump

Published on 12/06/2008 10:59

PROPERTY prices in the Capital have made it the sixth most valuable city in the UK – despite the average Scottish home falling in value by around £10,000 in less than a year.

New figures show the housing market downturn has wiped more than 20 billion off the value of residential property in Scotland.

But the research shows that homes in Edinburgh are collectively valued at 58 billion, making it the sixth highest in Britain.

The credit crunch has reduced the value of the average home in Scotland to just over 150,000 – down from more than 160,000 when the market peaked last year.

Property experts Zoopla.co.uk said that despite the fact property in Scotland has fallen in value, it is likely to escape the worst of the UK-wide crash.

Local experts believe that even though the market is considerably slower than it usually would be at this time of year, the city is keeping its head above water.

Former Hearts chairman Leslie Deans, who runs estate agent Leslie Deans & Co, said: "Edinburgh is not immune to the difficult period that the property market is currently experiencing.

"It's not as active as we would expect at this time of year and the number of people getting involved is not as high as one would expect, but we don't have evidence of prices crashing.

"It may change, but we certainly don't have anything like the problems they have down south."

Jamie Macnab, director of Savills in Edinburgh, admitted, however, that Scotland has been affected more than estate agents had first anticipated.

He said: "Me and most of the other agents thought that Scotland would manage to avoid the worldwide difficulties and we would get away with a short slowdown. In retrospect, it was a bit naive.

"That said, our offers over system is going to help us out because when we have competitively priced properties on the market, they still sell well. It's not all doom and despair like in some parts of England. Our London office is really suffering."

According to the Zoopla.co.uk report, the recent slump in property prices has wiped off more than 1 billion a day from the value of British homes in a year-on-year comparison.

The value of the Scottish market has gone down from more than 420 billion to 401 billion.

Alex Chesterman, chief executive of the property valuation website, added: "Despite the recent market downturn, it is clear the British property market remains one of the most valuable in the world.

"The past few months have been challenging but the long-term trend is extremely positive."

Homes in London – which make up 13.3 per cent of the total housing wealth in the UK – are collectively valued at 776.26 billion, while Glasgow is the third highest in Britain with a total value of 75.16 billion.