Price is right for city's home market to start its recovery

THE decline in the number of people putting their home on the market is slowing the rate that Edinburgh house prices are falling, giving estate agents hope that the city's market is close to bottoming out.

The number of homes being put on the market slumped by more than 70 per cent in the first two months of this year.

The number of homes marketed for sale by the Edinburgh Solicitors Property Centre (ESPC) at the end of last month was 5000, compared to more than 6000 for large parts of last year.

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Agents said that the slowdown in houses coming on to the market was now resulting in demand from buyers being closer to the supply of houses – resulting in more competition for each property.

Although they said that prices were still declining, it is expected the decline will be much less severe this year and prices could even start to creep up in the second half.

Property firm Savills said that it was starting to see a big increase in interest from buyers at its Edinburgh office.

One large Colinton family home that the firm brought on to the market earlier this month got 20 viewings in its first weekend of being advertised.

The firm also said it saw an 84 per cent increase in viewings at the Platinum Point development it is marketing in Leith in the four weeks from February 8, compared to a month earlier.

Peter Lyell, director of Edinburgh residential sales at Savills, said: "We are seeing increased inquiries and a marked improvement in the number of viewings. It is too early to see if that translates into good prices and good sales, but we will see that in the coming months."

A new report by Savills on the Scottish property market said that in 2008 there was an "acute imbalance" between the high levels of property available and the number of those that were selling.

But it said it expected fewer properties to be launched on to the market this year.

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It predicted that would result in prices rising and more confidence being seen in the housing market.

However, Mr Lyell did warn that the market remained relatively unpredictable. He said: "There is a general nervousness and caution in the market, and people need confidence in order to buy."

The ESPC said that there did appear to be renewed interest among buyers. Spokesman Neil Harrison said: "We are now seeing that the stock that came on in 2008 is gradually moving, albeit it took an average of 107 days to sell in February, which was a week up on the previous year.

"Our members have been anecdotally reporting increased numbers of viewings and signs that the market is starting to move again."