Thaw sends average house price back over the £200,000 barrier

Published on Thursday 4 March 2010 21:39

HOUSE prices in Edinburgh are on the rise again after the "big freeze" which gripped the UK triggered a new year slump.

The average price of a home in the city is just 405 more than two years ago, according to figures released yesterday – but, crucially, it rebroke the 200,000 barrier in February, up 1.7 per cent on the previous month.

Last month's average of 200,126 was also up 2.8 per cent on the same period in 2009, as estate agents reported a surge in properties being put on the market since the turn of the year.

Experts insist there are "steady signs" of a recovery in the capital's property market, which has been battered since prices dropped for the first time in 37 years in August 2008. The market is still nowhere near the peak of July 2008, when the average price was 245,415.

The optimistic noises emerged in Edinburgh despite separate figures yesterday showing a drop of 1.5 per cent in house prices across the UK, amid warnings the market is slowing across the country.

And the Edinburgh Solicitors' Property Centre, which produces the monthly analysis of house prices in the city, said it expected the average figure to remain "pretty static" over the next year.

The ESPC's figures released yesterday showed the average price of a home in the city has risen six months out of the past seven.

January's average of 196,691 – down 0.8 per cent on the same month in 2009 – was blamed on bad weather putting off buyers and sellers, particularly during the first two weeks of 2010.

However, ESPC business analyst David Marshall said it was particularly encouraging that the number of homes going on to the market in January and February was double what it was during the same months in 2009.

He added: "Following a quiet start to the year in January, when extreme weather conditions played a part in deterring buyers and sellers, February saw a significant increase in activity. Over 250 sales were completed during the last month, more than 20 per cent higher than in February 2009.

"The trend of steady recovery in the market continued during February, with prices holding steady and activity among buyers and sellers rising. The upturn in properties coming on to the market is particularly heartening, as an increase in supply will help to prevent house price inflation reaching unsustainable levels."

However, Mr Marshall said prices were likely to remain "largely unchanged" throughout the rest of the year as potential buyers struggle to mortgages.

Meanwhile, Halifax yesterday blamed the winter and the stamp duty threshold falling back to 125,000 at the end of December for UK houses prices falling for the first time in eight months during February. The average price last month, 166,857, was 8 per cent above the "trough" reached in April of last year, and 4.5 per cent higher than February 2009.

Other indices have also pointed to a fall in demand since the beginning of the year, with the Royal Institution of Chartered Surveyors reporting a steep drop in activity during January.