January 2023 property market update
Property market data: Key points
- During November 2022-January 2023, the average selling price of property across Edinburgh, the Lothians, Fife, and the Borders rose 5.6% year-on-year to £284,614.
- Sales volumes dropped 15.7% annually during this period, while new property listings decreased by 4.1%.
- The median selling time of property was 19 days, highlighting that buyers were acting quickly to secure their next home.
- On average, 84.9% of properties sold for their Home Report valuation or higher, with the average property achieving 104.8% of Home Report valuation at sale.
- 26.6% of properties went to a closing date.
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Strong competition for homes despite political and economic changes affecting the market
The period of November 2022-January 2023 was a challenging period in the property market with changes to the financial market, the rising cost of living and the energy crisis all affecting the housing sector.
The Bank of England has just announced another rise in interest rates. Paul Hilton, CEO of ESPC, said:
“The Bank of England’s latest interest rates rise by half a percentage point to 4% is the tenth increase in borrowing costs in a row and will increase mortgage payments for homeowners on tracker mortgages who will pay about £49 more a month. Those on standard variable rate mortgages face a £31 increase. However, the rates rise should also mean better returns for savers.
“Buying a property is still a good long-term investment and it is important to seek expert advice. Whilst we would have expected a cooling in the market with the interest rates rises, it is apparent that the market across Scotland has remained robust with properties locally still attracting a premium and selling relatively quickly.”
There is also evidence the market is returning to pre-pandemic norms and we continue to see strong interest in home buying and selling with quick selling times and high levels of the Home Report valuation being achieved.
Between November 2022 and January 2023, new property listings in Edinburgh, the Lothians, Fife, and the Borders were down by 4.1% year-on-year.
With many people now seeking additional living space to accommodate home working, it’s no surprise that the prospect of a bigger, more affordable home outside Edinburgh city centre continue to be popular. There was a significant rise in new property listings in areas beside the sea – South Queensferry, Portobello and Musselburgh (an increase of 200%, 38.1% and 20% respectively).
Many locations in the Borders were popular during this period, with a 0.7% increase in new listings in the Borders and 35.7% in Peebles.
In terms of property sales, volumes across Edinburgh, the Lothians, Fife and the Borders reduced by 15.7% annually, with localised rises and falls in sales volumes highlighting regionalised variations in the property market.
Comparing property sales in November 2019-January 2020 to November 2022-January 2023 we see comparable numbers of properties, highlighting that the market is returning to pre-pandemic levels after two years of very high demand.
Dunfermline and Leith recorded the highest volumes of property sales from ESPC data in November 2022-January 2023, closely followed by Corstorphine.
Buyers keen to secure their dream home
The impact of the Bank of England raising interest rates by half a percentage point to 4% on 2nd February remains to be seen. It is the tenth increase in borrowing costs in a row and will add pressure to many households already struggling with the cost of living, as well as potentially impacting the number of mortgage products available.
However, buying a property is still a good long-term investment, shown by the fact that buyers were still keen to secure their next home between November 2022 and January 2023, with the average selling price of property across Edinburgh, the Lothians, Fife, and the Borders increasing 5.6% year-on-year to £284,614.
Dunfermline, in West Fife, and East Fife recorded some of the highest price increases over the last three months. The average selling price for homes in Dunfermline was £205,705, an increase of 12.1% annually, while property in East Fife had an average selling price of £301,247, up 13.2% year-on-year.
The City of Edinburgh saw average property selling prices rise 5.6% annually to £302,073. Following high demand for properties in the past year, one and two-bedroom properties were popular with Edinburgh buyers.
Many out-of-town areas saw rises in average selling prices, with two-bed flats in Joppa and Portobello increasing by 12.4% to £304,460 and three-bedroom houses in South Queensferry and Dalmeny rising 11.6% to £312,458.
There were also price increases in suburban areas with three-bedroom houses in Corstorphine, Clermiston, South Gyle and East Craigs increasing by 8.8% to £410,751. The average selling price of two-bedroom flats in Newington, The Grange and Blackford rose 5.8% annually to £315,904.
High levels of the Home Report being achieved
In November 2022-January 2023, 84.9% of properties sold for their Home Report valuation or higher, with the average property achieving 104.8% of Home Report valuation at sale – highlighting the competitive nature that is still prevalent in the property market in Edinburgh, the Lothians, Fife and the Borders. If we compare this to the last ‘normal’ year before the pandemic, in November 2019-January 2020, properties achieved 102.4% of Home Report valuations at sale – this should provide some reassurance to sellers that the market is continuing to perform well despite speculation to the contrary.
East Lothian properties attained the most over Home Report valuation, with properties achieving 106.9% of their valuations on average – 3.8 percentage points lower year-on-year.
This was followed by East Fife where the percentage of Home Report valuation attained was 106.1% (a 2.4 percentage points decrease year-on-year).
Midlothian properties achieved 105% of their valuations on average – a decline of 1.4 percentage points annually.
The City of Edinburgh continued to be a desirable place to live with properties in the area achieving 104.5% of their Home Report valuation on average, a decrease of 0.7 percentage points year-on-year. While sellers may be discouraged by this, it is positive news for buyers – in the past year we’ve seen some properties sell upwards of 10% over Home Report value and this cooling of the market means those who have been waiting to see how the market pans out may be encouraged to come forward.
Property market continues to move quickly
Despite the recent political and economic changes, owning a home is a good long-term investment and demand for quality local housing stock remains, demonstrated by the property market continuing to move quickly in the last three months with buyers facing strong competition.
The median time for properties to go under offer was 19 days, two days slower than the previous year. Comparing this to the same period in 2019, homes went under offer in 23 days in November 2019-January 2020, showing activity levels are now very close to those before the pandemic.
In November 2022-January 2023, homes went under offer the fastest in West Lothian in a median time of just 14 days, one day slower annually.
Properties in Midlothian, East Lothian and the Borders also performed strongly, with a median selling time of 18 days.
Looking at Edinburgh specifically, homes sold the fastest in the east and west of the city with a median selling time of 18 days. When analysing specific housing types, two-bed flats in Morningside and one-bed flats in Leith sold quickest, in 12 and 13 days respectively.
What does it all mean?
Paul Hilton, CEO of ESPC, explains: “The past three months should have been turbulent for the property market due to rising interest rates, the cost-of-living crisis and increasing energy bills.
“However, as the latest ESPC data shows, the market in Edinburgh, the Lothians Fife and the Borders is robust with strong competition for properties and 84.9% of properties selling for their Home Report valuation or higher.
“After a series of exceptional years with unprecedented levels of activity, the market appears to be returning to pre-pandemic volumes, which should result in a more balanced market for buyers and sellers alike.
“We are also seeing continued interest in suburban and out-of-town areas such as Corstorphine, South Queensferry and Portobello which are popular with young families and professionals who want homes with more space to accommodate flexible working patterns.
“ESPC solicitor estate agents are up to date with what is currently happening in the local market and have the skills and expertise to provide the guidance and support you need.”
Listen to our podcast episode: What happened in 2022 and predictions for the 2023 property market...
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