House prices in Edinburgh and the Lothians fell further over the summer as potential buyers continued to stay away from the market.
The average house price in the capital dropped to £222,525 in the three months to the end of August, 3.6 per cent below the level in the same period last year, according to the Edinburgh Solicitors’ Property Centre (ESPC).
It also reported a 5.3 per cent decline in East Lothian, taking the average price down to £223.347, and a 1.7 per cent slip in Dunfermline, where the average is now £139,073. But West Lothian and Midlothian saw increases of 7.5 and 5.8 per cent respectively, although low sales levels have distorted the price averages.
The latest figures are published a month after ESPC revealed that almost two-thirds of homes sold in Edinburgh and the Lothians in the past two years have gone for a price below their home-report valuation.
The housing market in Edinburgh and the Lothians continues to favour buyers, despite a small decline in the number of homes put up for sale over the summer, according to ESPC. And with little sign of an upturn in demand, the market is expected to remain subdued for months to come, warned David Marshall, business analyst at ESPC.
“The market is most challenging for sellers of smaller properties, with low demand from first-time buyers and buy-to-let investors, meaning those wanting to secure a quick sale at this end of the market will probably have to be willing to accept a lower offer than they might have hoped.”
He expects prices to continue easing back towards 2009 levels. “In months ahead, this is likely to continue meaning we can expect to see house prices in most areas to remain between 3 and 5 per cent lower than levels seen towards the end of last year.”
Values have held up better in some areas and sectors than others, however. For example, while the average price of a three-bedroom semi-detached home in the Edinburgh suburbs has tumbled more than 15.4 per cent over the past year, one-bed flat prices in the Leith Walk area are up slightly over that period.
John Boyle, head of research at Rettie & Co, said: “Such surveys are useful in a broad indicative sense, but the market is highly localised and different products in different places are behaving very differently. This is particularly true when volumes are relatively thin.” However, Mr Boyle believes prices will remain flat until there is a sustained recovery in the economy.
“There are downside risks, notably on the dangers of a double-dip [recession] and rising interest rates, but another significant housing market correction seems unlikely just now,” he said.
Robert Carroll, managing director of Mov8 Real Estate in Edinburgh, was more upbeat. “We aren’t experiencing notably different conditions this year compared to last year. However, in the last few months we have seen properties across the board selling, from the highest to lowest values,” he said.