Scotland’s capital has had a consistently strong market over the past few years but recently, the rate of house price growth has left other cities trailing in its wake.

Official statistics showed an 8 per cent rise in the annual average property price to £246,508 in November 2017, with some parts of the city seeing a 10 per cent rise. It’s a hot market characterised by quick sales and high competition for properties. The average Edinburgh property takes just 16 days to sell and more than three-quarters of home sales exceed their home report valuation.

Here’s how Edinburgh became the UK’s strongest property market…

Supply vs demand

One of the key factors underpinning recent price growth is the imbalance between supply and demand. The current undersupply of prime homes means multiple buyers end up battling it out, which can raise the selling price of a property to 10 or even 20 per cent above its home report valuation.

Family homes are particularly in demand with many families choosing to stay put and improve their existing home rather than move to a new property. The Land and Buildings Transactions Tax may be one of the reasons for this, as it is more costly than its English equivalent (SDLT) for homes over £333,000.

The level of competition is such that many people are holding off putting their property on the market until they have found and secured their new home, which also contributes to the lack of supply.

It’s relatively cheap

Edinburgh may be Scotland’s most expensive city, but compared to southeast England, you get a lot for your money. Average house prices are almost half those of London, Cambridge and Oxford, and lower than many other cities in southern England.

With many property experts blaming the stagnation of the London property market on prices reaching the limits of affordability, Edinburgh is still some way off this point. With more room for prices to rise, it’s likely that the current upward trend in Edinburgh house prices will continue in 2018.

A small city with a big heart

Putting housing market factors to one side, one of the main reasons for Edinburgh’s property price surge is due to its popularity as a place to live. In Deutsche Bank’s 2017 global quality of life survey, Edinburgh ranked second in the world, just pipped to the winning spot by New Zealand’s capital, Wellington.

Edinburgh may not be as big or as powerful as London, but its small size works in its favour. Many parts of the city are within walking distance and Edinburgh residents typically have the best traffic commute time of any major city. Add to that a vibrant nightlife and cultural scene, good business links and proximity to beaches and mountains, and it’s easy to see why many professionals are looking to relocate north of the border.

Great public and private schools

Good schools are a key factor in many parents’ decision to move. Competition for places in Edinburgh’s best state schools is fierce and has pushed house prices up even further in key catchment areas. This is particularly noticeable in the areas surrounding two of Scotland’s top state schools: James Gillespie’s High School and Boroughmuir High School.

There’s also a great choice of fee-paying schools with almost one in five children in Edinburgh attending an independent school. Top choices include Fettes College, George Heriot’s School, The Mary Erskine School and Merchiston Castle.

If you’re considering buying in Edinburgh, we have some fabulous homes for sale, take a look.