Property market’s golden oldies see their value soar

HOUSES built in Scotland before the end of the First World War have seen the biggest surge in prices over the past 25 years, a study has found.

The average price of Scotland’s pre-1919 houses has risen over the quarter-century by 528 per cent – equivalent to £462 per month – from £26,264 in 1986 to £165,002 in 2011.

This increase is higher than the UK average for equivalent-aged properties, which was 461 per cent, and beat even London, on 521 per cent.

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It was also significantly higher than the average house price increase for all properties of 359 per cent – or £366 per month.

The more modern properties built since 1960 have seen the next largest rise in house prices, increasing over the past 25 years by 336 per cent, to £141,104.

At the other end of the scale, properties built between the end of the Second World War and 1960 – a period that saw the advent of both the high-rise and more European-style open-plan homes – have seen the smallest increase in prices, with average of 201 per cent over the period.

Nitesh Patel, Bank of Scotland housing economist, said: “The age of property determines its size and location. Properties from the Victorian or Edwardian era that are so prevalent in the major cities such as Edinburgh, Glasgow and Aberdeen tend to be in higher demand. There are fewer of them, they are often larger, situated in desirable locations and have a popular style. It’s easy to see why pre-1919 homes witnessed such a dramatic increase over the past 25 years.

“Modern properties, built since 1960, have their own pull, which is sometimes linked to convenience, whether it is a location within commuting distance or the fact little extra work is needed.

“Properties built between the end of the Second World War and 1960, on the other hand, include many smaller properties, which will contribute to the smaller rise in price over the last 25 years.”

In Scotland, pre-1919 properties and those built since 1960 have seen the smallest decline since the start of financial downturn four years ago – 12 per cent and 14 per cent respectively, compared with an average house price fall of 18 per cent.

However, across the UK as whole, prices for pre-1919 homes have suffered more in recent times, declining by 30 per cent.

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Over the past 25 years, properties built from the 1960s onwards have enjoyed a 348 per cent price increase, to an average of £169,168.

Mark Hordern, of the Glasgow Solicitors Property Centre, said the figures were not surprising, given the nature of property development over the decades.

He added that another factor in pre-1919 properties sustaining their value came down to their location, as they tended to have been built in the most desirable areas of cities in the first place, with subsequent development radiating out from them.

Mr Hordern said of the increase for such houses: “It is entirely credible for two reasons. Firstly, room sizes in Edwardian houses tended to be larger than room sizes in more modern ones. So if you’ve got a four-bedroom house built by the Edwardians, and one built in the 1960s, the former is going to be 50 per cent bigger in terms of floor area.

“So, if you average the floor area relative to selling price, they might come out with a very similar price per square foot. It’s just that the Edwardian one has more square footage.

“But also, it is also true that traditional properties tend to be in the most desirable areas, and you do see variations in price per square foot in different areas.”