Shortage of homes in Edinburgh and the Lothians

THE number of new homes coming onto the market in Edinburgh and the Lothians has dropped by 8.8 per cent between May and July compared to the previous year, adding to the growing gulf between supply and demand, a report from the ESPC has shown.

Property has been coming onto the market in reduced numbers when compared to last year. Picture: Alex Hewitt

The organisation said 61.5 per cent of homes are achieving their Home Report valuation, indicating the market is still in favour of the seller as fewer properties are being put forward for sale, driving up demand for any properties which are on the market.

The gap between supply and demand for homes, especially in Scotland’s cities, has widened in recent months.

Experts have claimed an expected flurry of homes put on the market post General Election has not materialised. The Residential Market Survey published last week by RICS Scotland warned that the growing demand could lead to strong price gains over the next twelve months.

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Maria Botha-Lopez, ESPC’s business analyst, said: “This month’s house price report shows that this is the second three month rolling period where we are seeing average selling prices at about the same level as they were this time last year. It appears that the short term effects of Land and Buildings Transaction Tax (LBTT) have tapered off, and it will be some time before we see the long term effect.”

While the average selling price of properties across east central Scotland remained at almost the same level between May and July 2015 compared with the same period last year, some areas - such as Morningside and Merchiston - have seen a larger increase than others.

The average price of a two bedroom flat increased by 18.3 per cent between May and July 2015, compared with the same time last year. Stockbridge and Comely Bank are continuing to grow, with a 10.7 per cent rise in average property prices for a two bedroom flat.

Meanwhile, East Fife and Dunfermline are continuing to be popular places to buy a property, with up to 15.2 per cent growth in property prices.

Robert Carroll, managing director at Edinburgh-based estate agent Mov8 Real Estate, said: “Sales are up over 12 per cent with listings down almost two per cent. So clearly the pressure on supply, with demand far outweighing supply, is a critical factor in explaining why prices are continuing to head northwards. Property buyers in Edinburgh and the Lothians are clamouring for more properties to choose from.”

However, other areas of the city have seen a decrease in the average price of a home.

Average prices for a three bedroom house in Liberton and Gilmerton have decreased by 22 per cent.