Capital’s house price bubble must be pricked
RISING London house prices are back in the headlines accompanied by dire warnings of likely interest rate rises, but less attention has been paid to a similar comparison between Edinburgh and the rest of Scotland.
The average cost of a home in Scotland’s capital now exceeds £229,000 compared to a Scottish average of £160,000. And estate agents in Edinburgh are warning that there is the potential for a mini property bubble in the capital as supply has not kept pace with demand.
A closer analysis of the Edinburgh market shows that demand for homes in the city is most acute for semi-detached properties with prices increasing by an astounding 12.8 per cent between March and May 2014 to just under £250k.
It’s easy to see why. Over recent decades most new homes built in Edinburgh have been brownfield flatted accommodation with only a small minority of houses catering for families seeking a home with a garden. Not only has this led to house price increases but it has also resulted in the export of families to areas around Edinburgh where such accommodation is cheaper and more readily available. This leads to increased commuting, not what the present government has in mind when encouraging reduced car travel and sustainable development.
The recent City of Edinburgh Planning Committee discussions around the proposed Local Development Plan indicate that some councillors recognise that steps have to be taken to address this shortfall in the city.
Key decision-makers, from councillors to government ministers, will need the courage to recognise that to provide for all types of accommodation in Edinburgh, unpopular decisions will have to be taken. If they do not, then the inevitable consequence will be further unsustainable property price rises and the outmigration of families to Fife, the Lothians and further beyond with the associated consequence of increased carbon emissions as commuters make longer and longer journeys to their jobs in the city. • Hazel Sears is regional director of planning at Halliday Fraser Munro. http://www.hfm.co.uk/