FIRST-time buyers in the capital are facing even more difficulties securing property as a dramatic shortage of homes on the market drives premiums up and selling times down.
According to a leading city estate agent only around 1000 homes are for sale in Edinburgh, with the result that around 84 per cent of those sold in the first quarter of the year went for more than their home valuation report.
This is a marked rise on the 55 per cent recorded during the same period two years ago, said Warners Solicitors and Estate Agents.
David Marshall, the company’s operations director, said: “The main driver for the strong seller’s market is simply a lack of properties available for sale.
“The number of homes on the market just now is less than a half of what you would typically expect at this time of year, where you could historically count on closer to 2500 listings.
“This supply shortage has been a characteristic of the market for a number of years now, with fewer homes on the market encouraging fewer potential movers to act.
“This is compounded as Edinburgh’s population increases and older buyers increasingly look to downsize.
“For those who are simply looking to sell this is all great news of course.
“They can reasonably expect that their property will sell quickly and achieve a good price.”
Warners’ research came as a report by independent think tank the Resolution Foundation predicted that up to a third of UK millennials (those born between 1980 and 1996) faced living in private rented accommodation all their lives.
The current situation does nothing to help first-time buyers, who increasingly need additional reserves of thousands of pounds to try to secure a property, as lenders do not tend to approve mortgages over a property’s valuation.
For a £130,000 one-bedroom flat selling at the average premium of 6.7 per cent above its valuation, that would require close to £9000 up front, not including the deposit and fees.
“There are some reasons for optimism for buyers,” continued Marshall.
“As we look forward in 2018 there are potential headwinds facing the market which should lead to the market cooling down somewhat in the months ahead. In many areas of the UK, and in particular further south, the market has already begun to cool.
“It is reasonable to think that this will have a knock-on effect for the rest of the country in due course.
“This is unlikely to be sufficient to fully redress the current imbalance between supply and demand however and overall the market is likely to remain challenging for buyers throughout 2018,” he added.
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