House prices: Edinburgh’s 509% house-price boom

HOUSE prices in Edinburgh have rocketed more than five-fold over the past 25 years – one of the highest increases in the UK.

Across Scottish cities, property values have shot up by an average of 351 per cent over the period, exceeding the increase of 347 per cent for the UK as a whole, according to the Bank of Scotland.

Edinburgh’s 509 per cent increase is the third-highest of any city in Britain, behind Truro at 550 per cent and Westminster, London, at 522 per cent.

Inverness is also in the top ten, experiencing a rise of 450 per cent.

“With an increasing and more affluent population in Edinburgh over the last 25 years, and strong economic growth for much of this time, it is no surprise to see the city near the top of this table,” said Tony Perriam, director of residential sales at Rettie & Co.

Nitesh Patel, housing economist at Bank of Scotland, said: “Cities have typically seen higher house price growth than the UK average over the past 25 years.

“City house prices are generally supported by demand from those looking to gain from the economic and lifestyle benefits often associated with residing in major urban areas.”

The study, carried out ahead of a new round of applications for city status to mark the Queen’s Diamond Jubilee, found that towns which had become cities since 1986 – including Inverness and Stirling – performed above average.

The 26 towns which have applied for city status this year have, on average, not experienced as rapid a house price growth over the last quarter of a century as existing cities. Scotland’s applicant, Perth, has seen prices rise by 372 per cent since 1986 – well above the average for all applicant towns of 345 per cent.

Ms Patel added: “The performance of cities in Scotland has been similar, with four of the six cities outperforming the Scottish average. Edinburgh and Inverness have seen very strong house price growth, both featuring in the top ten UK cities since 1986. Glasgow and Stirling, however, have seen average prices rise more slowly than for Scotland as a whole.

“There are, therefore, no guarantees that city status benefits its population’s homeowners.”

The experience of those towns that became cities in 2002 to coincide with the Queen’s Golden Jubilee has been more mixed.

Only Newport, Wales, has recorded stronger price growth than its region since 2002, while Preston, Stirling and Lisburn, Northern Ireland, have all underperformed relative to their regions. During the decade prior to 2002, both Stirling and Lisburn outperformed their regions.

Sarah Speirs, director of RICS Scotland, said: “Property in sought-after areas always attracts more buyers and therefore sells for a premium. Cities that offer good jobs, respected schools and a range of social and family activities will always be popular with investors and owner/ occupiers, so it’s no surprise that house prices have risen so much in the past 25 years.

“However, city status alone is not enough to push up prices. The city has to have enough going for it to attract buyers and investors.”