Europeans flocking to the capital to grab £1m+ homes

CASH-RICH Scots and foreigners are helping the market for Edinburgh homes worth £1 million or more to recover, according to experts.

A report from estate agent Rettie & Co claims the capital is becoming more attractive to Europeans – who want to invest outside the eurozone but see London as too expensive – and buyers from Asia.

However, the impact of increased sales at the top end of the property market is not likely to be felt at the bottom.

Dr John Boyle, head of research at Rettie & Co, which sold a third of the city’s top properties last year, said: “The top end of the housing market in Edinburgh is now in recovery mode after a sharp slump in sales during the economic downturn. Edinburgh accounts for around half of all £1m-plus property sales in Scotland.

“We expect this end of the market to recover more quickly than the overall market in 2012 as quality, well located property is more likely to attract a premium.”

Scotland’s property market as a whole will remain static for another three to four years, according to the Rettie & Co report. Property prices across Edinburgh were up 3.4 per cent from January 2010 to January 2011, according to the Edinburgh Solicitors’ and Property Centre (ESPC); however, the average cost of a one-bedroom flat in Gorgie and Dalry fell by 11.5 per cent.

Neil Harrison, ESPC marketing manager, said: “The sale of one property for a million pounds has less impact on the market than the sale of ten £100,000 homes as the ripple of sales does not happen to the same degree.

“However, research has shown that the majority of buyers of houses for over £1m in Scotland are already based in the country, so there is a strong likelihood of wider economic benefits as buying activity picks up.”