Edinburgh second only to London for £1m sales

Published on Sunday 1 May 2011 16:45

SALES of £1 million homes soared in Scotland last year as the top end of the property market bounced back from the slump.

A report out today from Bank of Scotland shows that 148 properties worth 1m or more changed hands north of the Border in 2010, 45 per cent up on 2009.

Sales of homes valued at less than 250,000 rose by just 5 per cent over the same period.

Edinburgh accounted for almost half of Scotland's 1m sales and saw more homes sold in the top bracket than anywhere in the UK outside the south east of England.

The report reveals that 70 properties were sold for at least 1m in the capital last year, accounting for 47 per cent of million pound sales in Scotland.

The next highest tally was in Aberdeen, where ten properties were sold at 1m or more. Homes of that value were sold in three quarters of local authority areas in Scotland, even in a mortgage market that remains significantly subdued.

But million-pound property sales in Scotland were still 40 per cent below the level prior to the credit crunch that started in 2007, despite the pick up last year.

Suren Thiru, housing economist at Bank of Scotland, said: "The number of properties sold for over 1m has risen substantially over the past year, reflecting the strength of the very top end of the housing market.

"Activity in the upper end of the market in Scotland continues to benefit from strong demand from wealthy buyers from outside Scotland and limited supply.

"In contrast, the level of activity across the wider housing market remains subdued."

Andrew Smith, partner at Strutt & Parker in Edinburgh, expressed surprise that the Edinburgh total was not higher.

"Taking the sales we've seen I thought it would have been more. You could happily find a nice flat with a garden that is 1m in its own right in an area like New Town, Inverleith or the Grange."

Smith said the 1m-plus market had picked up in recent weeks after a quiet winter. The biggest demand is for large family homes, much of it from people paying by cash and not having to negotiate the mortgage market.

The proportion of homes sold to cash buyers has doubled in the past five years, according to the Council of Mortgage Lenders. Its figures show that four in ten properties sold in January went to someone who did not need mortgage funding, up from 18.7 per cent in June 2005.