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No Let-up In Boom As 2-bed Flat Prices Up £50k In Edinburgh

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No let-up in boom as 2-bed flat prices up £50K

ADRIAN MATHER

HOUSE prices in Edinburgh are continuing to soar with an average two-bedroom flat rising by almost £50,000 in the last year.

Figures released by the Centre for Economics and Business Research today showed that the Capital's housing market remained strong despite four interest rate increases since last August.

The study also showed that the average length of time a property stays on the market in Edinburgh has also fallen to around 27 days - more than a week less than the figure recorded last year.

And property experts have said that the report shows the city is still experiencing a housing boom, with the average property price now standing at £225,000.

David Marshall, business analyst with the Edinburgh Solicitors Property Centre, was reported to have claimed that demand from outside investors and first-time buyers in the Capital showed "no sign of abating".

However, he added that further interest rate rises could put off buyers within the coming months. He said: "The prospect of interest rate rises should result in a cooling of the local market, with house price inflation returning to around the seven per cent mark predicted at the turn of the year."

The figures also showed that, in Edinburgh and the Lothians, house prices have risen on average by more than 15 per cent this year, with the average two-bedroom flat rising by almost £50,000.

Ron Smith, chief executive of the ESPC, said: "The level of growth that we have witnessed in east central Scotland, and particularly in Edinburgh, has been remarkable."

Earlier this year the ESPC said that, despite the current housing boom in Edinburgh, there were not enough properties in the city to meet demand.

It added that the fierce competition for homes was likely to drive prices up further and said that Edinburgh had a shortage of family homes - which was causing a "ripple effect" of people moving out of the city to find homes.

The report also shows that the rising house prices trend is being repeated across the rest of the country.

In Glasgow, prices have risen by more than 11 per cent this year while the city has seen an average 134 per cent increase in prices since 1999. Glasgow's fashionable West End, in particular, has proved popular with prices now rising three times faster than they did a year ago.

Michael Samuel, chairman of the Glasgow Solicitors Property Centre, said: "Buyers have remained remarkably resilient in the face of higher interest rates and home owners are not taking the opportunity to realise their capital gains by selling.

"Our view is that the slowdown of the market has been delayed, not cancelled, and that price growth will moderate at some point this year, although exactly when is open to debate."

This article: http://news.scotsman.com/scotland.cfm?id=1035662007

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Guest portwinestain

"home owners are not taking the opportunity to realise their capital gains by selling."

I like that bit at the end.

Edited by Bear-lite

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Guest Cletus VanDamme

And apparently Edinburgh has never had a property crash.

Should be interesting to see what happens in a few years. First time for everything.

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And apparently Edinburgh has never had a property crash.

Should be interesting to see what happens in a few years. First time for everything.

Perhaps Scotland's fabled sealed bid process works against buyers here (and conversely for the seller)? If they think there is stiff competition then perhaps they offer over the odds?

Funny how the UK property market seems ruled by secrecy (England has agents blackmailing propertysnake to stop showing reductions) and Scotland has closed bidding. What would be wrong with an auction process for everyone? It works for fine art, cars and household goods, even houses sometimes. Why the secrecy ?

Edited by Warwick-Watcher

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Perhaps Scotland's fabled sealed bid process works against buyers here (and conversely for the seller)? If they think there is stiff competition then perhaps they offer over the odds?

Funny how the UK property market seems ruled by secrecy (England has agents blackmailing propertysnake to stop showing reductions) and Scotland has closed bidding. What would be wrong with an auction process for everyone? It works for fine art, cars and household goods, even houses sometimes. Why the secrecy ?

Yes, you are quite right - the Scottish sealed bids system (which is shrouded in secrecy) is horrendous for buyers (great for sellers). I have a relative in Edinburgh who put his house up for sale just over a year ago, at offers over £275k. The winning bid was £420k - exactly £70k more than the next highest bid. But there is absolutely no way of telling what sort of bids you are competing against so you end up paying over the odds to secure a property in a rising market.

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And apparently Edinburgh has never had a property crash.

Should be interesting to see what happens in a few years. First time for everything.

That is what I am told regularly by people at my work - it is seen as an English (and predominatley SE England problem) I dont think half of them realise just how ridiculous things have got here.

I am very much of the opinion that some are going to get a shock over the next few years. There are literally thousands of flats sorry "luxury apartments" scheduled to be built over the next year or so here in Edinburgh. There are already forests of To-Let boards across large parts of the City.

Edited by lulu

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This is simple propaganda.

Edinburgh prices indeed are the looniest of all and they will suffer greatly, in the fullness of time. (Apologies to people in Dublin and other cities, I'm probably wrong about Edinburgh being the craziest.)

You bet that outside investors are the ones ponying-up, for anyone with any knowledge of the area who buys into this market (or has bought over the last year or two) will find it very hard, very soon.

I've seen a two-bed (new build fancy-pants vastly overpriced for outsiders) in one of the worst streets in Europe going for three hundred thousand. After the crash they might get 90-100,000. I grew up in that area and I know the difference between a street full of streetwalkers and a street where the streetwalkers have been moved on (for a while).

Indeed, this type of hype has to happen so that prices can work up a bit of steam on the way down. I don't believe volumes are high but the market needs one last run up on volume so thin you could probably see the one buyer responsible for the whole average.

Also, are these asking prices or done deals? For the Scottish market has a very interesting wrinkle where 30-90% (soon to be 0% for blind auctions will disappear) of the price is completely hidden by the offers-over system.

His (vested interest) comment about first-time buyer demand not abating sounds extremely iffy to me. It is simply impossible for first-time buyers to be sustaining demand within such a highly-inflated environment. (Sorry, I think they called it "growth".)

I love the way they cover themselves with the bit about interest rates rising and thus prices will only rise by 7%. This guy must have a time machine. Why not 7.3%? Why not up 5% or 3%? (Makes it sound real though.)

I'd have to see their methodology to gauge why they've come out, right in front of potentially the greatest crash the world has ever seen and published such bullishit [sic].

Here's what they (the ‘analysts') say on their site: "...even the Treasury publishes our predictions for the UK economy."

Even the Treasury? My, my, you guys must be very proud.

The Treasury is fab at predictions (as are, therefore, these guys) as long as everything is going to go up in nice single, friendly figures (say 2-9%). Then reality gets to be the same as the prediction. How nice that must be for reality.

I wonder if they think the housing markets in other parts of the world are going down because they're in other parts of the world?

Unfortunately, exactly the same things that are bringing prices down in the US are bringing prices down in Australia; Mmm, what do they say about the rest of the world? Nothing? Perhaps Edinburgh is immune? Perhaps Edinburgh exists within its own little economy, unbothered by pesky interest rates and crashing CDOs? It's the haggis effect. No doubt these geniuses will be right on it, dissecting that which makes wearing a kilt financially sensible.

Of course, everyone is rich in Edinburgh, I suppose that helps prices. There's Pilton and Wester Hailes and Niddrie and Drylaw and Leith... the list of wonderful areas simply stretches out before one. (Pilton used to be the only place in Western Europe that got aid from Oxfam, and ask J.K Rowling why she moved out of Wester Hailes.)

The average price is 225,000? If that is a real price then how many units were assessed? How many done deals? Might not the FTB market have gone AWOL two years ago when the average price was only five times their basic salaries? The average wage in Scotland is, I believe, but someone can correct me if I'm way off the mark, around £20,000. So the current average house price in Edinburgh is more than eleven times earnings? And these jokers are claiming the first-time buyer market is strong?

Lies, damn lies, wee guys who should be held to account.

So, interest rate rises could cool the market to a 7% rise. Well I'll see your 7% rise and raise you a 70% fall from these levels.

They say the average two-bed rose by 15% or £50,000: Wouldn't that make the average two-bed price around £333,000? So the figure of £225,000 is a figure with lots of one-beds in it?

I have to say that I find this article a disgrace and I'd bet my left bollock that almost none of it is true. It calls itself a study. It is a study in hoodwinkery.

I live in Glasgow and I watch prices like the old lady across the road watches everyone. I hardly take my eye off them for a minute and I know they have not risen by 11% this year, or if they have it's only because it's only more expensive houses that now get sold; thus pumping an average but not general prices. There is almost no first-time buyer's market in Glasgow's West End.

And in Glasgow or Edinburgh or anywhere else in Scotland, for that matter, nobody ever knows what any price is because of the offers-over system. So if it's done deals then the deals do not tell the tale and if it ain't then forget it anyway. The only way to gauge prices is after they're done (a three-month wait) or to badger estate agents and everyone else. But these guys sound like they’re implying that they’re talking about current prices (as if they got it from the horse’s mouth; you know, all those honest-to-goodness estate agents).

But this is an important phase of the crash. These guys think they're preparing the market for another interest rate rise. What they don't get is that we don't have no mo' money left to buy two beds over a whorehouse and next to the docks (sorry, area buzzing with cafes and art galleries and trollops) for three-hundred and thirty grand.

I just realized that if the average two-bed rose by £50,000 or 15% then that means the new price is £330,000 plus 50,000 (given that 15% equals £50,000) so it's now £380,000 for a two bed?

If put on the rack these guys would probably say that two-beds went up 50,000 but not 15% and everything else went up 15% and not £50,000. Either way, I hope they're enjoying themselves ripping the guts out of the poor sods who believe them.

I think I'll buy one. I'll sell it in ten years for £750,000 or I might even keep it for twenty, when it'll be worth £1.5 million (at only a modest 7% 'growth').

I love the property market. It never goes down, it always goes up forever.

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