High premiums are increasingly being required for buyers to secure homes in and around Edinburgh, Warners Solicitors and Estate Agents found.
Almost four out of five (78.6%) homes are now achieving a selling price in excess of their home report valuation – an increase of more than 20% compared to the same period last year.
The average premium being paid has also risen from 2.9% over valuation a year ago to 5.5% today.
David Marshall, operations director at Warners Solicitors and Estate Agents, said: “A great deal of the house price growth that we have seen over the last 18 months has been driven by an excess of demand over supply.
“The improvement in supply that we are now seeing will help to alleviate the pressure on buyers and bring greater balance to the market.”
Although good news for those selling their properties in and around the capital, these statistics show that the market is not looking so favourably towards first-time buyers especially.
The increase in premium prices means that first-time buyers need to have an average of £8,250, as well as their deposit, to secure a £150,000 home, as lenders will only provide lending up to the home report valuation.
However, since November the number of properties being brought to the market has risen, with Warners experiencing a 33% surge in new listings year-on-year.
This growth, spurred on by the demand for properties in Edinburgh and the Lothians, should see house prices moderate as the market balances.
Marshall added: “Moving forward in 2018 we expect that the market will still be buoyant, but with the higher premiums that we saw during 2017 becoming less prevalent as the year progresses.
“This should help to keep house price growth in the local market broadly in line with CPI inflation at between 2 and 3%.”