As I mentioned in one of my blogs the other week, I was having a cup of tea at Cafe Contini in George Street recently with a landlord. This landlord already has a couple of residential properties as well as a commercial unit that are doing very well for him and is on the look out for a third residential property. When we were talking, he asked me a question that made complete sense in terms of commercial property but was as bit ‘left field’ from a residential property point of view – how much he should be paying per square foot?
Well, that was a challenge and you know how I like a challenge!
So I did my research and found out that:
- The average flat in Edinburgh is currently selling for approximately £323 per square foot costing, on average, £228,110.
- Terraced houses in the town are currently selling for, on average, £378,876 or £317 per square foot.
- An average semi in Edinburgh is obtaining for £370,631 and achieving £317 per square foot.
- Finally, the average detached house in Edinburgh is achieving £334 per square foot and is selling for £565,637 although this selling price is skewed by a relatively small number of high value properties that do not make viable buy to let properties.
Now these are of course averages, but it gives you a good place to start from.
My research reveals that Edinburgh flats tend to generate a better yield than detached, semi-detached or terraced houses (probably because there is greater demand for rented flats than there is for houses in Edinburgh), flats tend to appreciate in value more rapidly than detached, semi-detached or terraced houses (probably for the same reason) and flats may well be easier to sell (remember 65.1% of properties in Edinburgh are flats compared to a national average of 36.4%).
So, flats are the cheapest to buy in absolute £ terms, are not far off the cheapest to buy in per sq ft terms, give the highest rental yield and give the highest capital growth.
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