Average Edinburgh house price falls by 5%

Quarterly figures from Edinburgh property solicitors body ESPC show the average house price between December 2012 and February 2013 was £191,623 compared to £201,657 a year ago.

However, some types of property have held their value better than others – with the average price of three-bedroom suburban properties continuing to rise. But the price of one-bedroom starter flats is falling.

The price of a three-bedroom semi-detached property in the suburbs of Edinburgh rose by 8.5 per cent annually to £232,306.

By contrast, the average price of a one-bedroom flat on Leith Walk or Easter Road fell by 16.4 per cent and now stands at £89,326.

More than eight out of ten (83.9 per cent) homes sold for less than their Home Report valuation, down slightly from 85.9 per cent a year ago. On average, buyers paid 6.3 per cent below the Home Report valuation.

David Marshall, business analyst with ESPC, said: “You tend to see some volatility in prices at a local level from one  period to the next, and certainly I wouldn’t anticipate that we’ll see such a sharp rate of change in either case continuing over a prolonged period of time. That said, the market for family homes has generally been more robust than that for smaller properties over the last couple of years.

“We’ve started to see more first-time buyers and buy-to-let investors returning to the market, but in most cases they’re looking to negotiate reasonable discounts from sellers. As a result, while the number of sales of smaller homes has risen, this hasn’t been matched by an increase in prices.”

The average house price in Edinburgh has fallen every month since July 2012, according to the ESPC figures.

In East Lothian, the average house price rose by 17.4 per cent from £182,300 to £214,037. However, the rise in prices was caused by the sale of a large number of newly built larger homes. More than a quarter (27 per cent) of homes sold in East Lothian were properties with four or more bedrooms.

West Lothian also saw a sharp rise (17.4 per cent) in the average house price, but this came on the back of a similarly sharp decline (26.6 per cent) a year ago.

The property marketing company said the squeeze on mortgage lending meant there were fewer buyers, resulting in sellers being forced to accept lower offers.

Mr Marshall said: “Although the number of homes selling has been rising over the last 12 months or so, market conditions continue to favour buyers, which is why we’re still seeing a majority of homes selling for less than their valuation.”

In terms of volume of sales, the ESPC say the situation is improving – with the number of sales 7.6 per cent higher than the comparable period last year.

However, the number of homes sold is still about 35 per cent lower than when the market reached its peak in 2008.