EDINBURGH has been revealed as the UK's brightest property hotspot in the past year.
House prices in the capital increased by 10 per cent in 2017, while the total value in the city's housing stock was grew by the highest amount of any other local authority area in Britain.
According to research by estate agent Savills, the average price of a home in Edinburgh reached a record high of nearly £285,000, while the value of the housing stock across the city grew by £7.5 billion from £61.4 billion in 2016 to ££68.9 billion last year.
The surge in value throughout out the property market was driven by an increase in the number of new build houses being bought and sold, which increased by 30 per cent last year.
Some of the highest sales volumes took place in the suburban locations of Liberton and South Queensferry, while the redevelopment of Edinburgh St James at the eastern edge of Princes Street is revatalising the east of the city centre.
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Faisal Choudhry, Savills Head of Residential Research in Scotland said: “Scotland has witnessed its strongest market since 2007, with price growth now outperforming London.
"Values will continue to rise due to a lack of supply and strong city economies. In particular, Edinburgh’s residential market profile continues to excel.
"The lack of supply and strong domestic and international demand for property in the Capital is one of the main reasons behind a rise in prime values in Edinburgh City.”
At the upper end of the market, prime transactions - those above above £400,000 - reached a record 1,733 which was 15 per cent higher than 2016.
Transactions above £750,000 increased from 247 in 2016 to 274 in 2017. Hotspots were centred on the Grange, Morningside and Merchiston areas, with a total of 377 transactions last year, overtaking the traditional million pound hub of the New Town.
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However, there remains a "vicious circle" driven by a lack of supply where some sellers do not want to put properties on the market because of a lack of homes to move into.
Ben Fox Head of Savills Edinburgh Residential said: “The number of prime second hand properties launched on to the market in Edinburgh’s New Town fell by 33 per cent last year, compared to 2016.
"The Land and Buildings Transaction Tax [which replaced stamp duty in 2016] is still affecting supply issues here, and the lack of choice has resulted in a vicious circle, as potential sellers delay launching to the market until a suitable property is available."
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