265 Venues, 2,098 shows and 34,265 Performances...

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14 August 2009

August is an exciting month to be in Edinburgh as the various festivals open their doors and the city is besieged with a horde of tourists, comics, actors, artists, and beggars with a suspiciously diverse range of accents. At this point, as an Edinburgh resident, I should probably join the annual chorus and decry the inconvenience and disturbance caused to me when I try and get my latte in the morning behind a throng of people who clearly don't know how to queue properly, or how getting from one side of the city to the other now takes an age. However, this year I feel the malcontents might be less vociferous than in the past.

Maybe it is the fact that in these recessionary days we are spending less time queuing in Starbucks; or maybe it is the fact that Edinburghers have long since grown accustomed to the impossibility of getting around town due to the tram works. Or more simply may be it is the fact that a city full tanned, stylish, talented and enthusiastic visitors, praising the beauty and vibrancy of Edinburgh, is a welcome boost for a city whose confidence has taken a knock in recent years (that and a financial boost of over £100m to the local economy). So as Edinburgh is swathed in tartan for the 'Homecoming' maybe we should look afresh at the city through the viewfinders and lenses of our guests and remember why Edinburgh is regularly voted the most desirable place to live in the UK and is in fact such a good place to live, work and own property.

With the population of the city estimated to double over the festival (performers alone account for almost 19,000 visitors) the requirement for accommodation is substantial. The ability to let out a fairly typical two bedroom flat in the city centre for a weekly rental that is the same as its monthly rate is a particularly profitable Fringe benefit that might not be included in your typical yield calculation.

Perhaps it is this rental potential or just the pent up demand that has developed over the past 18 months, but this summer we have seen a swelling of interest in the market with activity remaining more buoyant than might be expected for the summer months. In a year-on-year comparison, enquiry levels are up an average 35% this year. Our viewing figures, which are arguably representative of more serious or committed purchasers, have also remained notably above the levels seen at the start of the year. This persisting interest during the summer months has been consistent across all our offices and whilst not shown in the graph below, has during some weeks in June and July been at a level comparable with the spring market; not typical of the summer season and in the past fortnight alone we have conducted over 270 viewings.

However the market is changed from previous years and reflective of this has been the buying power registered this summer, down circa 18% year on year. The combination of  increased interest but with less financial muscle is illustrative of the fact that buyers have either selectively or due to lending constraints, adjusted the level at which they participate in the market. This said, since 1st July we have placed over £34m of property under offer and since the start of the year have also sold 15 property in excess of £1m; 8 of these transactions occurring in June and July. Such figures give strong support to the view that confidence is returning to the market and the days of the unopposed cash purchaser must now take second billing.

What is becoming apparent in the market is that buyers who have been holding off, expecting further price falls or due to wider uncertainties, are now returning to the market with purpose. Many, if not all yet, are now committing to buy and for those that aren't this is partially due to the lack of stock available. In many ways the current market is much like the festival, the best tickets are snapped up quickly almost before you realise they are available; however there are some hidden gems to be found for the dedicated Fringe goer.

Whilst I would urge everyone to take in a show, try a new restaurant and stroll through the city while the festivities are in full flow (and in-between rain showers); if you are looking to buy then it may be prudent to put aside the show programme once in a while and keep one eye on the property listings as the curtains prepares to be raised on the September market.

Other statistics to be positive about...

June lending statistics released by the Council of Mortgage Lenders have shown lending increasing 23% from May to June this year with levels only 6% lower than the same time last year; 78% of the new lending in the second quarter was in the form of fixed rate loans taking advantage of low interest rates. The CML has also announced that arrears have stabilised and slightly receded in the second quarter of the year. UK repossessions are also down 10% in the second quarter, although still 14% up year on year. These statistics add the growing number of indicators which are pointing towards stability, if not recovery quite yet. Lending statistics in particular can be a useful indicator of appetite and future house price movement.

Links

www.edfringe.com/

www.edintattoo.co.uk/

www.edbookfest.co.uk/

www.eif.co.uk/

Contact Us

If you have any questions, would like any further information regarding the above content or would like to discuss how the Rettie & Co. Consultancy & Research Team can help your business, please do not hesitate to contact:

Andrew Meehan
Researcher
t: 0131 624 9051
e: andrew@rettie.co.uk

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