Amid all the talk of UK’s housing market being in the doldrums, Knight Frank has named Edinburgh as one of Europe’s hotspots for investment properties. Quarter-on-quarter, Q4 2018 saw the value of Edinburgh’s more exclusive residential property rise by an impressive 10.6%. That’s the biggest price rise in a decade and over 4 times the national average. And prices are not just going up. Top end properties in Edinburgh are also selling faster than they did a year ago.
‘Prime’ Edinburgh property is classified as homes that sell for £2 million or more. These more expensive homes have seen their price growth outstrip that of the rest of the city, up an annualised 16%. Knight Frank puts the boom down to ‘pent up demand’ as the market readjusted to property tax rises. The best performing areas of the city were the New Town and West End.
According to Office for National Statistics data, the UK average house price growth over the 12 months up until the end of October was 2.7%.
While England and the UK’s capital London has seen its prime property market afflicted by the political and economic uncertainty caused by Brexit, the Scottish capital doesn’t appear to be suffering from the same malaise. Prime central London homes saw their average prices drop by 4% over the year up to the end of November. More expensive properties in greater London dropped by 4.8%.
However, for anyone considering jumping on the first train or flight north in search of investment properties offering returns most of those in the south of England can only dream of, Knight Frank cautions 2019 growth may not prove quite as strong a prospect. As Brexit approaches in March, uncertainty might well spread north and cool the market in Edinburgh too.
Scotland’s economy has not escaped ‘Scot free’ and is showing signs of distress. Over Q3, economic growth was less than half that of the UK average. Quarter-on-quarter GDP growth was a mere 0.3% compared to 0.5% over the previous quarter. While Edinburgh’s economy is, and can be expected to continue to be, much stronger than that of Scotland is a whole, the capital is unlikely to prove entirely immune to the wider local situation.
However, the success of Edinburgh investment properties over 2018 is further evidence of the currently fractured nature of the UK property market. Major regional cities in the north such as Manchester, Birmingham, Liverpool, Glasgow and Edinburgh have all shown strong price growth while the south has suffered slides.