Savills research reveals Edinburgh’s prime residential value growth outperformed all UK regions in 2019. Other than the usual factors, such as value for money and quality of life, what is driving Edinburgh’s property market growth and can it continue?

Edinburgh Airport’s £75 million terminal expansion opened last year, with passenger numbers reaching 1.5 million. Scotland’s capital is now truly connected with the world with direct flights to the US, China and the Middle East and the airport plans to support increased passenger levels to 20 million per year by the end of this project. Not only is the city more accessible to the rest of the world (indeed buyers from outside Scotland now account for 20 per cent of our overall market), we are now a more viable option for those whose jobs take them around the globe. 

Another project which has received global attention has been Edinburgh St James, one of the largest urban regeneration schemes currently underway in the UK. Due to open in October this year, it will offer a new level of retail, leisure and residential opportunities. Following the injection of prime retail and commercial investment which has been directed to nearby St Andrews Square, this is another shot in the arm for east of the city centre. The Edinburgh St James effect has already taken hold: properties in nearby Hillside are enjoying almost 2.5 times more viewings than other parts of the city. The area is now far surpassing its 'up and coming' title.

The Edinburgh City Centre Transformation draft strategy, Edinburgh: Connecting our city, transforming our places, outlines £314 million of investment which will see improvements throughout the capital, with the aim of reducing traffic and increasing quality of life for residents. These plans, combined with the completion of the tram extension over the next couple of years, will almost certainly have an inflationary impact on nearby property prices. Similar plans, such as those seen in Manchester and Dublin, have resulted in additional property price growth of up to 15 per cent for houses close to tram stops and main transport hubs.

While Edinburgh’s reputation as a financial services hub remains a strong pull, the rapid emergence of the technology sector is bringing a new buyer profile to the city. Scotland is now home to more than 10,000 digital companies, employing more than 80,000 staff*. With leading tech names like Skyscanner, Fanduel and Rockstar choosing to locate here, Edinburgh is considered the digital capital of this fast expanding sector. Indeed the University of Edinburgh’s School of Informatics ranks among the best in the world, fostering a dynamic start-up scene and attracting global venture capital.

On a price per square foot, Edinburgh is now within touching distance of cities such as Dubai and Madrid but still appears extremely affordable when compared to the likes of London, Hong Kong, New York and Tokyo. We may be living in uncertain times but the city continues to defy gravity and has proved remarkable resilience after all uncertainty has been priced into our market over a decade. With significant potential for further price growth, Edinburgh appears to be future-proofed and well placed to compete with other leading global cities.

*Figures supplied by Scottish Enterprise

Further information

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