Podcast: An update on the local property market

The ESPC Property Show is back! In this episode, Megan & Paul return for season 5 to discuss the local property market in Edinburgh, the Lothians, Fife & the Scottish Borders. The episode also answers questions including "Is it getting easier for first-time buyers?", "where are the local property hotspots?" and "how to spot a good deal in the market?".

Watch the episode here↓

 

Listen to the episode on Spotify or Apple Podcasts or watch the episode on YouTube

Key Insights

Is it getting easier for first-time buyers?

The market has become slightly more accessible for first-time buyers due to an increase in property supply and a reduction in the premiums paid over the home report value. Some mortgage rates have now dropped below 4.5%, making borrowing more affordable compared to previous years, and some buyers may also benefit from wage increases, as wage inflation has been around 5-6%.

There is currently less competition from landlords, as government legislation has discouraged some from purchasing properties, although this could change in the future. The government could introduce further initiatives, such as adjusting LBTT thresholds or reintroducing a Help to Buy scheme, but nothing has been confirmed.

Property hotspots & regional price growth

Property prices in sought-after areas like Leith continue to rise, with two-bedroom flats increasing by 12.5% year-on-year to an average of £261,486. The price increases seen in Edinburgh are beginning to spread outward, making areas like West Lothian, Kinross, and Kirkliston more attractive.

Kirkliston saw a significant 37.1% increase in average property prices, potentially due to high demand for family homes and larger properties. Improved transport links, such as the extension of the Edinburgh tram network, have made areas like Leith even more desirable.

Overall market trends & stability

Property prices across Edinburgh, the Lothians, Fife, and the Scottish Borders have risen by 4.6%, which is roughly in line with inflation. The increase in supply last year helped stabilize price growth, with 30% more properties available at one point.

By the end of 2024, demand picked up, leading to a 21.6% increase in sales during the final quarter. The current market is described as active but stable, with fewer extreme fluctuations compared to previous years.

Interest rates & economic impact

A LinkedIn poll conducted by ESPC found that 35% of respondents viewed interest rates as the biggest challenge when buying property, ahead of property prices (26%), supply (26%), and economic uncertainty (13%).

Although mortgage rates have started to decline, with expectations of further reductions throughout 2025, there is still some uncertainty around the broader economy, as economic growth remains weak, and consumer confidence plays a key role in the housing market.

The Bank of England’s approach to interest rates will be a crucial factor in determining market conditions for the rest of the year.

Where to buy investment property in 2025?

Investors looking for strong capital growth and rental demand should consider areas like Kirkliston, South Queensferry, and Portobello, where prices have risen sharply. For buy-to-let investors, one-bedroom flats in areas like Gorgie and Leith remain solid choices, especially within the £900 - £1,100 monthly rental range. These properties tend to have strong demand and consistent occupancy.

The recent removal of rent caps until 2027 may encourage more landlords to return to the market, potentially increasing competition for first-time buyers. Potential investors should be mindful of the Additional Dwelling Supplement (ADS), which is now at 8%, as this impacts the upfront cost of buying rental properties.

Advice for sellers - when to list?

Sellers are advised to list their properties now rather than waiting for spring or summer, as the current market conditions are strong, and demand remains high. With median selling times at 22 days, properties are still moving quickly. Listing now could provide an advantage, as competition from other sellers is lower compared to peak seasons.

Advice for buyers - How to spot a good deal

Fixed-price properties can offer good opportunities for buyers looking to avoid competitive bidding wars. First-time buyers, in particular, should leverage their "no chain" status when making offers, as sellers may prioritize buyers who can move quickly.

If you plan to buy this year, you can sign up for a My ESPC account to receive email alerts when properties matching your criteria are listed, giving you a head start in booking viewings and making offers. Another sound piece of advice for buyers is to work closely with solicitor estate agents who can help buyers navigate the competitive market and identify the best strategies for securing a home.

Predictions for the year ahead

Property listings started slowly in early January but have been picking up throughout February, suggesting increased market activity. The expectation is for continued strong demand, though house price increases are likely to remain stable rather than surge dramatically.

Mortgage rates are expected to continue decreasing, which may encourage more buyers to enter the market. Potential shifts in landlord activity, changes in government policy, and overall economic conditions will play a key role in shaping the market throughout 2024.