The latest quarterly Edinburgh City Index, by property specialists Knight Frank, reveals that the number of £1m-plus deals in Edinburgh was 24% higher year-on-year over the 12 months to July 2019.
Edinburgh accounted for 64% of all such deals in Scotland over the period.
The EH10 postcode, which includes the leafy Morningside, The Braids, Merchiston, and Comiston districts, was home to the greatest number of £1m-plus sales (36), followed by the EH9 postcode including Marchmont and the Grange (34).
Knight Frank reported that prices for prime properties - over £500,000 - rose by 0.9 per ent between July and September because of an imbalance between supply and demand, partly caused by prospective sellers being cautious before Brexit.
During the last quarter there were 7.5 new applicants for every new sale instruction in the capital, compared with 5.7 in the same period in 2018. The strongest demand was in the market up to £750,000, where there were 8.7 buyers per new instruction.
Oliver Knight, associate of Knight Frank Residential Research, said: “A shortage of available properties being listed for sale means the imbalance between supply and demand in the city is likely to continue, especially given the cautious approach being employed by some vendors as uncertainty surrounding Brexit mounts.
“Buyer demand remains strong, however, evidenced by the continued growth in prime sales volumes, and competitively priced stock will continue to trade well.
“Agents note that off-market deals, where properties are offered to buyers and sell before being launched formally, have become more commonplace within higher price brackets, and this is expected to continue.”
He added: “New build sales are playing a much bigger role in the £1 million-plus market in Edinburgh, supported by the launch of a number of new schemes since the beginning of 2018 and also a relative shortage of stock compared with demand in the resales market.”
Meanwhile, the latest research by Springbok Properties, which has offices in London, Manchester and Glasgow, has found that additional demand fuelled by the Help to Buy scheme has inadvertently pushed up property prices for some first-time buyers.
While the scheme has helped many first time buyers on to the property ladder, the influx of additional demand has also pushed the cost of Help to Buy homes upwards.
First Time Buyers
Across Britain, the average cost of a first-time buyer property has increased by 32.8% since 2013, almost on par with the regular market. In Scotland, prices have risen by 19.9% from £101,872 to £122,148 during the same period.
The City of Aberdeen, which has been hit by falling oil prices in the past few years, is the only area of the UK where first-time buyers are paying less than in 2013, dropping by -10.9% to £126,794 in 2019.
Some areas of Scotland have only seen modest rises, as Inverclyde prices have risen by just 6.55% to £83,995, while South Ayrshire prices have seen a 6.9% uplift to £102,992.
Shepherd Ncube, founder and CEO of Springbok Properties, said: “Help to Buy was introduced by the previous government with good intentions -- to assist would-be home-buyers in their first step onto the property ladder.
“However, it seems that whilst around 200,000 buyers have indeed been supported, the unintended consequence in most areas has seen an above average hike in prices driven by the demand that Help to Buy has created.
“First rung homes are supposed to be more affordable, but we’ve seen the average price paid by a first-time buyer accelerate to similar levels as the wider market.
“Not only has this made it more difficult for today’s aspirational homeowner, but perhaps some tax-payers might question the wisdom of using their money to fuel house prices even further.”