The number of prospective house buyers registering with Knight Frank’s Edinburgh office has increased by over 120% during the past six months while prime residential properties worth under £1m rose almost 3% in value in the first half of 2010.

Villas and flats in the New Town and West End of the city have shown the strongest recovery this year, reports Knight Frank’s Edinburgh office.

Matthew Munro, head of Edinburgh city sales (0131 222 9608) explains: ‘It’s very encouraging to be able to report that the market for Edinburgh’s best houses and flats has started to show some signs of recovery. Values are by no means recovering across the board and are still some way below the levels seen prior to the credit crunch, but some sectors of the market are undoubtedly in far better health than they were at the end of 2009.’

There has been a strong increase in interest from prospective house purchasers, including many enquiries from overseas, combined with a more realistic approach to pricing by vendors, which has combined to help inject some life into a market that was hit particularly hard by the banking crisis. In the first half of this year the number of buyers registering with Knight Frank increased by 123% compared with the previous six months.

‘The section of the market where we have seen most demand and price growth is for properties under £1m. An increase of over 1.5% for the second quarter of the year takes total growth for 2010 to almost 3%, with properties in this price bracket now worth over 4% more than they were 12 months ago.

‘Properties worth under £1m are in particular demand benefiting from high net worth buyers setting their sights a little lower. Those, for example, who would have been looking at detached villas and substantial townhouses are instead now viewing equally high-quality, but smaller, terraced houses, villas and large flats, thus creating competition at closing dates.’
 
Mr Munro cites the example of a property in a prime location within the Morningside area of the city which went to closing after only 10 days with six notes of interest and sold for substantially more than the  £825,00 asking price. ‘And a Georgian terraced townhouse in the New Town area recently went for 10% over its £2.2m Home Report valuation.’