House prices set to rise in Edinburgh due to unique growth factors

A letting agency predicts Edinburgh’s house prices will rise due to the city’s unique circumstances.

Scotland’s largest letting agency DJ Alexander says over the last decade Edinburgh has seen a surge in highly skilled, well-paid workers from around the world, which has boosted its economy and housing market.

DJ Alexander is urging the Scottish government to provide more investment to landlords.

Edinburgh unemployment rate lowest in the UK

In the decade to 2021, Edinburgh’s population grew by 10.2% compared to a rise of 3.4% for Scotland as a whole.

The capital’s working-age population grew by 8.6% during this period compared to 0% growth for the rest of Scotland.

Edinburgh leads all UK cities with 82.2% of its population being economically active, surpassing London at 78.6% and Glasgow at 73.6%.

The capital’s unemployment rate of 2.6% is the lowest in the UK and its median hourly pay of £17.70 is the highest outside London.

Gap in house prices between Edinburgh and the rest of Scotland has grown

David Alexander, the chief executive officer of DJ Alexander Scotland, says several factors have driven up house prices in Scotland.

He said: “Multiple factors have produced a city that is growing rapidly and extending its growth into the surrounding areas around Edinburgh producing major housebuilding programmes resulting in prices rising steadily in East, West and Midlothian.

“The gap in house prices between Edinburgh and the rest of Scotland has grown enormously over the last decade with the average price now £327,751 in the capital compared to £191,435 across the rest of the country.

“That is a difference of £136,316. The difference with Glasgow is even greater rising to £151,696.”

Edinburgh becomes unaffordable

Mr Alexander adds: “When you examine average prices for detached homes the gap between Edinburgh and the rest of Scotland is more marked. A detached home in Edinburgh is now £715,794 on average while in the rest of Scotland is £336,060 lower at £379,734.”

“There is an extraordinary difference between the capital and the rest of Scotland and there is a risk that Edinburgh becomes unaffordable for people moving into the city in the future, but appropriate action now will ensure the capital remains accessible.”

More support for landlords

Mr Alexander adds the Scottish government must do more to support landlords.

He said: “Encouraging greater investment by property investors and support for landlords would produce a steady flow of suitable homes for the well-educated, well-paid, working-age people flooding into the city keen to live and work in a dynamic and lively location.

“To mitigate wider demand there needs to be more housebuilding generally and a substantial increase in the volume of social housing is essential. Amazingly Edinburgh has a further advantage over the other major cities in the UK in that it is the least densely populated allowing for further building in the future.

“A growing Edinburgh is a positive sign of a growing Scotland and should be welcomed.”

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