Mid-market movers drive house sales up

Published on Tuesday 2 June 2009 10:15

STRONG demand for "mid-priced" homes is said to be driving the first hints of a revival of the Capital's property market.

The number of homes sold in May was higher than in any month since last October. And agents say that the 250,000-750,000 segment of the market has seen the strongest sales.

New data from the Edinburgh Solicitors Property Centre shows that 371 homes were sold in May – an average of 12 a day.

Although the figure is still well down on the same time last year, the rate of decline is much slower than in previous months. And it is a much higher rate of sales than when the scale of the financial crisis became clear last autumn, when average sales volumes plunged to as low as 4.5 a day.

Simon Rettie, managing director at Rettie & Co, said: "There is a feeling now that there is a shortage of quality stock. There are more cash purchasers and, perhaps on the belief that the market has levelled out, they are taking a view that it is a good time to buy.

"In areas like the New Town there are very few traditional flats and there is an increasing number on our database waiting for that sort of proposition."

Mr Rettie said the mid-market was driving the modest return of demand as there are fewer restrictions to people pushing ahead with a purchase.

"At the top end, the greater issues of the economy and job insecurity are curtailing activity, while at the bottom end there are still difficulties in getting funding," he said.

"But in the middle, which would be 250,000-750,000, there is perhaps more liquidity. People may have cash in their properties and are able to move upwards, sideways, downwards or whichever way they want to move."

Willie Hunter, partner-in-charge at Hunters Residential, said his firm had sold 39 properties in May, up by about a fifth on previous months, although still about a fifth behind the same time last year.

"Good property is selling," he said. "If you have a property in great shape that doesn't need anything done to it then it is a huge bonus. This time last year, when people were able to get 95 per cent mortgages, they could keep some cash aside and do it up. Nowadays, you don't get that type of mortgage at sensible rates so people are chucking everything into their deposit.

David Marshall, a business analyst at the ESPC, said:

"The month-on-month rise can in part be explained by seasonal trends. Fewer people buy property in the winter months. However, we are starting to see some signs of an upturn in the anecdotal feedback, in particular in relation to the number of buyer enquiries."