Property tycoons are buying up houses in Edinburgh after forecasts that the London property market has peaked.
There has been a 30 per cent increase in wealthy investors acquiring buy-to-let homes in the Scottish capital in recent months, according to Cullen Property, a lettings agency based in the city.
Campaigners say that a boom in sales could drive up prices, making homes less affordable and sparking a housing crisis.
Steve Coyle, operations director at Cullen Property, said investors were “preferring to move away from London investment, feeling that the property market there had peaked” and were keen on exploring other UK investment hotspots.
He said: “They were interested particularly in Edinburgh as, unlike other major UK cities, it has the diversity of being a major student centre as well as being the second tourist city destination in the UK. They were particularly interested in the city’s heritage and quality property on offer.” Long-term serious investors had not been put off by increases in tax at the top end of the property market for second homes, and other agents had reported similar trends, he added.
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The average property price in Edinburgh now stands at £233,255, up 3.2 per cent year on year, more than £40,000 above the average for England and Wales. This compares with an average price of £534,785 in London. Stuart Montgomery, director of lettings for Rettie, agreed that there had been a switch from London to Edinburgh. He said investors believed that Edinburgh was a “safer” and more “robust” bet compared to the rest of the UK, with the market sharing similarities with London.
ESPC, another lettings agency, also said there had been a “high demand” for buy-to-let properties in the lead up to a new second home tax being introduced at the start of April. Demand for privately rented accommodation is rising. Average rents in Edinburgh are already set to hit £1,000 a month for the first time, with prices up 6.6 per cent year on year.
Graeme Brown, director of Shelter Scotland, said the rise was “alarming” and would “worry renters across Edinburgh, many of whom are already feeling overwhelmed by the increasing pressure of sky-high housing costs”.