Signs of Life in Scottish Home Market

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Prices for prime Scottish residential property increased by 1.4 percent during the third quarter compared to the previous quarter, marking the first time prime property prices have increased in more than three years.

The increase in Scottish property prices was led by the capital city of Edinburgh, which recorded a two percent quarterly price increase and a 2.2 percent jump from last year, Knight Frank says in a new report.

"The Edinburgh market has improved significantly this year with buyer interest and activity picking up noticeably," Matthew Munro, partner in Knight Frank's Scottish residential department, said in the report. "Family homes in well-recognized and desirable central residential areas, such as New Town, are attracting much attention when they come on to the market. 

The number of homes purchased during the third quarter in Edinburgh, the Lothians and Fife increased by 43.8 percent compared to last year, reaching its highest in six years, according to a report from Edinburgh Solicitors Property Centre (ESPC) released today. 

Buyers are demonstrating interest in different property segments, the firm reports. 

"Activity and interest from prospective buyers has been greatest for homes worth up to £750,000, but we have also noticed a rise in interest for properties at the top end of the market," Ran Morgan, head of Knight Frank's Scottish residential department, said in the report. "Buyers are showing a particular interest in landmark properties - be they coastal homes, traditional estates or just properties that boast interesting architectural features."

The firm expects the introduction of Help to Buy Scotland to further boost the housing market and support the wider housing industry. Under the program, which began last week, the Scottish government will allocate £220 million over the next three years to help consumers with home purchases. The government will provide 20 percent of the new home purchase price for first-time buyers. 

Overall prices for Scottish property increased 0.3 percent annually, according to a new report from Knight Frank. But market watchers say these are signs that confidence is returning to the property market.

"The market is showing encouraging signs with the return of first-time buyers and investors, evident in the increase in sales of one and two-bedroom flats in the capital," David Marshall, business analyst with ESPC, told the Edinburgh News. "The percentage of sales where the valuation is achieved or exceeded has been steadily rising as market conditions for sellers have improved, however the majority of properties are still selling for less than the Home Report valuation."