Where does the time go?
We have reached the final quarter of 2024, and the Edinburgh and Lothians property market has shown remarkable resilience and balance, following a tumultuous period in 2022 and early 2023. This blog examines the current market trends, highlights key statistics, and offers insights into the potential impact of upcoming economic and political events on the housing landscape. With rising population numbers, increased demand, and competitive pricing, the region remains a highly desirable place to live and invest in property.
A Year of Stabilisation and Growth in the Market
After a tricky end to 2022 caused by the sharp rise to interest rates and market uncertainty triggered by Liz Truss and her disastrous Mini Budget, 2023 proved to be a more difficult year for the property market than we’ve witnessed for some time as sellers hesitated to list and buyers found themselves facing significantly higher mortgage rates than we’d experienced in recent years in response to the wider macro economic and political situation.
2024 so far has been much more enjoyable as we’ve experienced a balance to the market for the first time in a long time. It’s been neither a classic sellers nor buyers market here in Edinburgh and the Lothians, rather for the most part, there has been a steady balance of supply and demand enabling home movers the luxuries of time and choice.
Neilsons: A Market Leader in East Central Scotland
At Neilsons, we sell one in ten properties listed in East Central Scotland, meaning we’re really well placed to provide a clear picture of what’s happening in the local market. We have already sold £263.3m worth of property in East Central Scotland this year, more than any other agent!
We’ve listed a whopping 25% more properties this year than last year, providing 235 more properties for buyers to consider making their next home.
And whilst such a significant spike to supply might suggest that sales would slow down, our average selling time remains faster than the local market average and has stretched by just 2 days to a median selling time of 23 days – lightening-speed compared to the majority of the UK, with Rightmove, the UK’s largest property listing portal suggesting that the average sale takes between 62 and 154 days!
Positive Price Trends in Edinburgh and the Lothians
We’ve also seen a modest increase to the average Home Report value of 3% across all listings, whilst our average selling price has increased by a significant 10.2% – demonstrating that buyers are still experiencing competition and are prepared to pay over valuation to secure the property they desire.
All this goes to demonstrate the resilience of the market here.
Edinburgh and the Lothians’ Market Resilience: Key Factors
Edinburgh and the surrounding areas remain a hugely desirable place to live, with excellent employment prospects, highly regarded educational institutions from schools to universities, a stunning natural landscape with rolling hills and a sandy coastline, an ever-improving array of entertainment facilities (we’re excited for the new Lost Shore Surf Resort and 8,500 capacity Edinburgh Arena concert venue!) and of course a superb choice of property styles – from one bed tenement flats, through the medieval Old Town steeped in history and the grand Georgian splendour of our two UNESCO World Heritage Sites, continuing through the ages with Victorian, Edwardian and post-war flats and houses, detached family homes and the continuing expansion of the suburbs with award-winning new builds, Edinburgh really has it all.
Rising Population and Demand for Housing in Edinburgh and the Lothians
A report published this week from the National Records of Scotland (NRS) showed that in the year to mid-2023, Scotland’s population rose faster than at any time since the 1940s, noting that the main driver of population growth over the year was people moving to Scotland from abroad and other parts of the UK. Almost two-thirds of people moving to Scotland came from outside the UK and we also saw a fall in the number of people leaving Scotland. The NRS have confirmed to Neilsons that it remains the case that the highest levels of expected growth of population for the whole of Scotland remains in Edinburgh and the Lothians, so you can see that the demand for places to live here will continue. Edinburgh is a geographically small city, hemmed in by the Pentland Hills in one direction and the Firth of Forth in the other, so there’s a finite amount of property stock in central locations, which is likely to cause a continuing upward trajectory on property values.
Upcoming Events in the Social, Economic and Political Landscape and Potential Impacts on the Edinburgh and Lothians’ Property Market
Whilst all of this is encouraging, there are a couple more hurdles to straddle before the end of this year.
- UK Budget Announcement (30th October 2024): Rachel Reeves will deliver the first full budget of the new UK Labour Government on this date. Whilst many matters relating to property are devolved to the Scottish Government, the changes she could make to Capital Gains Tax and Inheritance Tax will affect Scotland like the rest UK, as will the proposed removal of VAT exemption to Private Schools. Edinburgh has over 1 in 4 children in private education, and a 20% increase to the cost of it might see some parents opt to move their children to a state school. We could therefore see a spike in demand for family sized houses in areas where the local schools enjoy excellent reputations.
- Monetary Policy Committee Meeting (7th November 2024): The Monetary Policy Committee will also meet on the 7th November to set the Bank of England Base Rate, which currently stands at 5%. Many economists are predicting that we’ll see a 0.25% reduction to the base rate which will be welcome news to mortgage borrowers and is certainly likely give the competitive mortgage market a further boost. The high choice of mortgage products, at more reasonable rates than we had two years ago immediately post-Truss, has certainly helped with the balance seen in the property market so far this year.
Future Considerations: Housing Policy and Scottish Political Landscape
Looking further into the future, a Scottish Parliament Election is expected in 2026 and a change of government could well be on the cards. Housing policy is highly likely to be a key battle ground on the campaign trail throughout 2025, with Edinburgh amongst 12 of Scotland’s 32 councils to declare a housing emergency. Certainly, whilst we speak positively of the housing situation here for those who own their own homes, at Neilsons we recognise our unique market dynamics are not helpful for those in rented accommodation, for those needing housing provided by the local authority or for young buyers looking to take a first step on to the property ladder and we would welcome a more robust housing policy to be provided by the Scottish Government, rather than the utopian ideals of the Green Party which were forced upon us by the Bute House Agreement and have yet to be resolved.
A truly healthy property market is one that functions well in all sectors, allowing nuance and choice of how and where people want to live.
What Lies Ahead for Edinburgh and the Lothians’ Property Market?
So, there’s certainly a lot to consider in this last quarter of 2024!
With nearly half a century of experience navigating the Edinburgh property market, Neilsons is well-positioned to provide the expert guidance you need. If you’re considering buying or selling a property, the current market conditions, coupled with strong local demand and a more favourable economic outlook, make it an opportune time to act. Get in touch with our award-winning team for a free consultation.
Book a free consultation with Neilsons here!
