Sales of £1m-plus homes are bucking credit crunch trend

Published on Saturday 3 January 2009 10:07

THE market for million-pound homes continues to thrive in the Capital despite the economic slowdown.

The latest housing market reports show there were 87 houses sold in Edinburgh for 1,000,000 or more in the year to October 2008.

While this figure is nearly a quarter less than the 112 houses sold during the height of the housing boom 2007, it still outstripped the 77 sales in the steady 2006 housing market.

Experts say the million-pound market was largely insulated from the credit crunch because sales usually go to buyers with a large amount of equity.

Those lower down the market, such as first-time buyers and expanding families, were more reliant on the increasingly elusive credit deals that dried up as the crunch hit.

Jamie Macnab, partner at prestige housing experts Savills, said he expected 2009 sales to be more conservative following the raft of executive losses and redundancies leading on from the collapse Lehman Brothers in October, and the subsequent shockwaves it sent through the credit markets.

Mr Macnab said the number of million pound properties going on the market "is probably at its highest point of all time".

There are currently 54 one million pound plus houses for sale in the Edinburgh area at rightmove.com.

These range from the 3.5m Langham House, at 65 Grange Loan, which dates back to 1880, to a more conservative four bedroom apartment overlooking the Botanics, in Inverleith Row, for just over 1m.

He said: "It's certainly been the most difficult year in my career and I've been at Savills for 21 years, but there are a few green shoots of activity coming through."

Maurice Allan, a negotiator for Strutt & Parker in Edinburgh, was optimistic that the market would stabilise in 2009.

He said: "In the last few years the market has been very strong but the kind of 10-15 per cent price rises we were seeing year-on-year were never going to be sustainable.

"It's been 20 years since the last significant slowdown so it's very difficult to gauge what is going to happen next year, but deals are still being done and they will probably continue at a more sensible level next year."

There were signs of optimism too at the lower end of the market, with the Edinburgh Solicitors Property Centre reporting sales roughly in line with their severely dented expectations as the year approached its end.

ESPC business analyst David Marshall said: "Prices continue to be between eight and ten per cent down year-on-year, but as the new year sets in and the interest rate cuts start to filter through to the high street you'll probably see more properties changing hands."