Edinburgh Residential Property Investment 2022
Scotland, and Edinburgh, continue to offer high return property investment opportunities in 2022
- Edinburgh remains one of the most productive economies in the UK with GVA per capita higher than any other major city outside London.
- In Edinburgh, the average detached property was sold for £716,419 in September 2021 and the average flat was sold for £244,555.
- As of September 2021, the average property price in Edinburgh increased by a 14.5% compared to the previous year.
- The average property price in Edinburgh in September 2021 was £321,166 which is higher than most other major UK cities outside London.
Looking back at 2021, the supply versus demand for residential properties in Edinburgh was very similar to the rest of the UK during the Covid pandemic.
The number of people registering an interest to buy was up by 66% compared to the five year average, excluding 2020.
On top of that, new instructions for sale of domestic properties were down by 10% for the same period.
Supply versus demand has created a sellers market in Edinburgh and properties are selling faster across the board compared to the same time last year.
It has also become a sought after place to live as people who can work from home now also want to move to parts of the country where they can enhance their lifestyle with gardens and easy access to the countryside.
These, and other factors, underline the supply/demand imbalance that has kept upwards pressure on prices and it looks like this is set to continue.
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Edinburgh’s residential property market finished strong in 2021. By the end of the year average prices in Edinburgh were 8.6% higher than the previous year and at a three year high.
Residential properties in Edinburgh are being snapped up faster than ever by buyers across Scotland and the rest of the UK and homes are being sold twice as fast as they were before the pandemic in 2019.
Prices keep rising and there just aren’t enough homes for sales to meet the demands. Properties are being sold so quickly that more than half of people who sell their homes achieve their full asking price, or above, when they accept an offer.
In their 2022 housing market forecast, Rightmove predicts that whilst the national asking price for a home will rise by 5% next year, in Scotland it is likely to see an even higher growth rate of 7%.
“With three new monthly price records in a row, 2022 has started with price-rise momentum even greater than during the stamp-duty-holiday-fuelled market of last year.”
~ Tim Bannister, Rightmove’s director of property data.
Average sold price in Edinburgh
The average sold price for a property in Edinburgh in the last 12 months (May 2021-May202) is £318,015.
Average rental price in Edinburgh
The current average asking rental price for residential property in Edinburgh is £1,565 pcm.
Why Edinburgh is the place to invest in residential property in 2022
- The average asking price for a five bedroom has increased by 97% since June 2020.
- The average property selling price increased by 3.3% year-on-year during January-March 2022, to £267,941.
- Prices surged 21.7% in the North West suburbs to an average of £299,480.
- Three-bedroom houses in South Queensferry and Dalmeny rose 21.6% to £288,936.
- One-bedroom flats in Abbeyhill and Meadowbank increased 17.1% to £179,712.
- Three-bedroom houses in Cramond, Barnton, and Cammo experienced a 31.6% increase in prices and an average selling price of £508,033.
Home.co.uk reports show that the demand for larger properties has increased dramatically since the lockdowns ended in June 2020.
Since June 2020, detached properties have seen a 79% increase in demand, and the asking price for a five bedroom has increased by 97%, whilst the number of detached properties on the market has decreased by 18%.
Large detached properties of five bedrooms or more have seen the largest price increase in Edinburgh.
Since October 2007, asking prices for detached properties have increased 103% whilst the number of properties available for sale of that type has reduced by 53%.
Flats and terraced houses have also increased in price and demand since 2007 by over 60%.
The asking price for 1-bedroom flats increased by 80%, whilst at the same time the availability of these types of dwellings decreased by up to 85%.
Edinburgh Outperforms London For Quickest Sale Of Homes Valued Over £1Million
Due to the lockdowns, people have started to migrate to Scotland to seek a better quality of life.
The opportunity for people to work from home has made the possibility of living in more rural areas that much more realistic.
Buyers who can afford it are choosing to buy properties with gardens or easy access to the countryside rather than face the prospect of being confined to four walls again in the middle of a city with limited access to places to take walks and get fresh air.
Million-pound properties in Scotland now find buyers within an average of 61 days, which is 25 days faster than before the coronavirus pandemic.
And the capital, Edinburgh, accounted for more than half of the million-pound home sales compared to before the onset of the pandemic.
A semi detached home has risen from £251,000 in 2007 to £547,000, an increase of +118% in value since 2007.
Average property price increase in Edinburgh in the last 5 years (from 2016).
EH1 – 56.7%
EH2 – 63.1%
EH3 – 57.6%
EH4 – 40.8%
EH5 – 81.2%
EH6 – 32.6%
EH7 – 41.7%
EH8 – 30.2%
EH9 – 39.5%
EH10 – 31.7%
EH11 – 43.5%
EH12 – 46.1%
EH13 – 23%
EH14 – 48%
EH15 – 73.1%
EH16 – 46.3%
EH17 – 68.5%
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Investment in Scotland and Edinburgh
- It’s the second largest financial centre in the UK and has growing technology and tourism sectors.
- It has low unemployment and is a wealthy city with an average disposable income of £21,800 per resident.
- The median hourly pay for workplaces in Edinburgh was £15.64 3rd only to London and Bristol.
- Edinburgh has one of the highest employment rates in the UK at 78%.
- Edinburgh has six universities and three colleges, and there are 90,465 students in higher education (university and college).
- It has one of the highest proportions of Higher Education students per 1,000 population.
- 65.2% of higher education students in Edinburgh were from the UK.
- In 2020, 62.1% of the workforce in employment was educated to degree level or above.
News on the Scottish government website highlights that there is to be a £33 billion investment in Scotland’s future.
This includes plans for significant capital investment in healthcare, education, transport and the environment over the next five years that will support 45,000 jobs across Scotland.
Commercial property Investment is also buoyant and reached £2.2 billion in 2021, according to the latest update from Colliers, an increase from £1.4 billion in 2020.
Retail property investment bounced back with a three-year high and saw volumes reach £530 million.
Retail, which experienced an increase in investment saw volumes reach £530m, a three-year high. And the office investment market was up from £380m recorded in 2020 to £640m in 2021.
Edinburgh council has invested £128 million to improve more than 3,000 council homes and build new houses in the capital over the next year.
“We’re really scaling up our efforts to improve the condition of people’s homes and driving forward our house-building programme, so that residents can have permanent homes that are energy efficient, safe and affordable. Our ambition has been to deliver 20,000 affordable new homes by 2027”
~ Kate Campbell, Councillor (SNP)
Edinburgh is one of the most desirable cities to live in the UK and visit in the world?
- It is the 2nd most visited city in UK with over 13 million visitors per year.
- The number of visits by overseas visitors to Edinburgh has increased by nearly 1 million from 2013 to 2019.
- In 2019 4.89 million people visited Edinburgh, generating £1.89 billion for the local economy (domestic and overnight visitors). 19.7 million day-trippers spent a further £1.17 billion.
- Edinburgh is full of wide-open spaces, and is the UK’s greenest city, with 112 parks, as well as more trees per head of population than any other city in the UK
population. - The population grew by over 50,000 in the last ten years and is expected to grow by a further 100,000 over the next 20.
- In the ten years to 2020, Edinburgh’s population grew by 12.3% from an estimated 469,930 to an estimated 527,620 people. This figure is expected to rise to over 600,000 by 2035.
- The wellbeing data scores life satisfaction and Edinburgh scores better than other UK cities in all categories except anxiety.
- Edinburgh’s residents are the happiest of the largest 10 cities in the UK – 97% are satisfied with Edinburgh as a place to live.
Without a doubt, Edinburgh is one of the most beautiful cities in the UK to live and work. It has a rich history, stunning architecture, a vibrant social scene, and is beside the sea, something that not many people are aware of who don’t live in Scotland.
For all of these reasons, students, young professionals, and businesses choose to live here and call it their home. It’s the reason that people from all over the UK are deciding to buy property here and settle down.
In a poll carried out by Cencuswide in December 2021, Edinburgh was voted one of the best cities to live due to its selection of supermarkets (51%), green spaces (40%), and good schools (31%).
Travel insurance specialists William Russell recently placed Edinburgh the 2nd most unique place to travel to in 2022 along with San Francisco, Amsterdam, and Washington DC which placed 1st.
The company analysed each city based on the number of unique and interesting things to do.
“We have ranked cities in the most populated countries around the world based on the number of unique, hidden and interesting things to do as listed on AtlasObscura, per 100,000 of the population to reveal the world’s best locations for a secret escape.”
~ Damian Porter, William Russel
The Edinburgh Festival Fringe
The Festival Fringe is coveted as “the single greatest celebration of arts and culture on the planet”.
For three weeks in August, the city of Edinburgh turns into a giant stage for the creative arts and entertainers from around the globe.
Artists and performers present shows all over the city and accommodate for every taste. Famous entertainers, from Ian McKellen to Rose McGowan, and Eddie Izzard to Stephen Fry, as well as lesser known artists come to expand and build their careers.
The festival caters for all tastes including theatre, comedy, dance, physical theatre, circus, cabaret, children’s shows, musicals, opera, music, spoken word, exhibitions, and events.
Interestingly, during the Edinburgh Festival, the population of Edinburgh increases to make it the second most populated city in the UK after London.
More importantly, the Edinburgh Festival Fringe has a large economic impact on the city and brings in well over £200m annually to Scotland and the UK (other sources put this figure closer to £1bn)
Conclusion
With its iconic architecture, buzzing culture and nightlife and world-famous education system, Edinburgh offers an excellent opportunity for property developers and investors in both the buy to let and buy to flip markets.
It has a growing population, ongoing investment in its infrastructure and housing, and is a popular tourist destination. Whilst property prices are high, they always offer a good return on investment for the savvy investor.
Edinburgh Property Examples And Prices
First-time buyer. One-bedroom flat. City centre. No refurbishment required. Within walking distance of popular shops, restaurants and bars.
Three-bedroom detached. Need for some modernisation, Good-sized rooms. Great views. Perfect property to renovate and sell to a family.
Buy to let. One-bedroom flat to rent. Easy access to the city centre. Close to shops. Ideal for professionals or students. Permit parking available.