House sales slide sparks fear over shortage of new families
New figures show that the impact of consumer fears about interest rates and spending, as well as the rising cost of buying property in Edinburgh, has had a knock-on effect on the number of people buying property.
And business leaders say the shortage of new homes being built in the Capital, together with the crisis in affordable housing to buy or rent, means fewer staff will be available to fill positions at expanding firms in the city.
The figures, from the Edinburgh Solicitors Property Centre (ESPC), show that 10,500 homes were sold in 2007, compared to 11,500 in the previous year. The value of the sales soared to 2.2 billion, with the average price of a home in Edinburgh surging 12.6 per cent to 220,111.
The Edinburgh Chamber of Commerce said city financial giants like RBS and the Bank of Scotland, as well as construction and engineering firms, were already finding it difficult to recruit key staff – and a drop in the number of people moving to the city would make it worse.
Ron Hewitt, chief executive of the chamber of commerce, believes more needs to be done to encourage house building in the city.
He said: "How can Edinburgh businesses attract and keep the right quality of employees if they can't themselves find the right quality of housing at prices they can afford?"
He said the shortage of all types of housing, including social housing, would have an impact on the prospects of companies, and urged the council to help ensure that proposals like Forth Ports' plan for the Edinburgh Waterfront, which includes up to 16,000 new homes, are supported by the council.
He added: "A greater flexibility (by council planners] about change of consent would be advisable."
Gerry More, chairman of house builder Cala Homes in Scotland, said that there was a dearth of good quality family homes being built in the right locations in Edinburgh.
Although Cala's new-build family homes in areas like Fettes and Balerno were selling well, he said too many flats in areas such as Newhaven and Granton could be slowing the market down.
"If there could be more land made available by the council for family homes, it would help in terms of pricing and getting more key skilled workers and their families into Edinburgh," he said.
"But the problem is too many two-bed apartments. Family accommodation is what is being cried out for."
David Marshall, a business analysts at the ESPC, said: "The market has started to cool towards the end of the year. Overall, there was 12.6 per cent price inflation but that had slowed to 9.7 per cent in the last quarter.
"Demand for property is still high, which is why we have seen high levels of price inflation."
But he added that he expects inflation to cool to between three and five per cent in 2008.