House Hunter: Scotland

'I'd like a period flat in central Edinburgh'

The problem

STEPHANIE LOCKHART, MAIDENHEAD, WRITES: My job as a financial consultant means I have to relocate from London to Edinburgh for at least three years, starting this spring. I am, in any case, in the middle of selling my apartment in Berkshire so instead of moving locally I will now buy a new home in the Scottish capital.

My new home will have to be located in or close to the centre of the city because my job involves long hours and I do not want to commute, even if I could buy a cheaper or larger property outside Edinburgh. My firm has taken me on two "familiarity visits" to the city since the New Year, so I know there is a lot of refurbishment of historic buildings going on.

I am very interested in the idea of living in a well-equipped, renovated apartment in a period building, with two or preferably three bedrooms as I must have my children and friends visiting at different times. Space for a separate home office would also be desirable but not essential.

My budget is about £400,000 - ideally, a lot less. This sounds a large sum but I know Edinburgh has been one of Britain's hottest property markets for some years. What can I get?

The advice

Graham Norwood replies: You are right to be cautious about high Edinburgh prices, but the city's market has cooled markedly in the past year.

After rises of 15 per cent in 2003 and 13 per cent in 2004, Scottish house prices rose 10 per cent in 2005, according to the Halifax/Royal Bank of Scotland. It predicts a 7 per cent increase this year - still more than almost anywhere else in the UK.

By contrast, prices in the Scottish capital rose just 1 per cent last year, taking the average price to £178,468 and making the city "more affordable for more people", according to HBOS economist Tim Crawford. Some suburbs, such as Marchmont and Bruntsfield, recorded falls of up to 7 per cent. Rival data from the Registers of Scotland - the equivalent of the Land Registry in England and Wales - puts the typical Edinburgh price at £181,397.

The city centre itself, however, continues to attract premium prices well above these averages. This is mainly because of the high specification of newly refurbished properties and because of strong demand from people like you - employees moving in to the city's burgeoning financial sector, which is the second largest in the UK and the fifth largest in Europe.

Property analysts say Edinburgh's housing market has not looked back since the Scottish parliament opened in 1999. The many departmental offices created new jobs, as did the Royal Bank of Scotland's move to larger headquarters in the city.

The city centre's residential areas are split in two by Princes Street Gardens. To the south is Edinburgh Castle and the Old Town, a warren of streets that saw some of Britain's earliest high-rise tenements. There were 80,000 people living here from the 16th century, although this plummeted about 100 years ago. More recent refurbishment of properties has bought the population of the area back to 20,000.

To the north of the gardens is the New Town, dating back to the 18th century with the oldest streets still on a grid system. This is now a much larger area than Old Town and is popular with well-paid professionals moving to the city.

The solution

Property one: Learmonth Terrace

Price: £425,000

Agent's details: This elegant maisonette is spread over the first and second floors of a New Town Victorian end-terrace house. There are four bedrooms plus a small first-floor study.

Agent: Strutt and Parker, 0131 226 2500.

Property two: Warrender Park Road

Price: Offers over £295,000

Agent's details: This large apartment is currently used as a five-bedroom property for students. With the saving on purchase price, however, you could convert it into a luxurious three-bedroom home with space for an office. There are two bathrooms and two receptions rooms already

Agent: Knight Frank, 0131 222 9600.

Property three: Moston Terrace

Price: £365,000

Agent's details: This three-bedroom, three-bathroom apartment has been modernised, "incorporating an interesting blend of contemporary finishes with original period features", according to the estate agent. There are two reception rooms and the property is close to the city centre.

Agent: Knight Frank, 0131 222 9600.

Fact file

As in England and Wales, the Scottish system of property buying is undergoing substantial changes, the most important of which is the new "single survey".

Until late last year, the Scottish system encouraged multiple surveys, costing hundreds of pounds each, to be conducted on the same property by rival would-be buyers. The information was never shared, so a seller could be inconvenienced by having multiple surveyors visit the home, while buyers went to unnecessary expense.

This was made worse by Scotland's "offers over" system, whereby asking prices are set artificially low to encourage many rivals to bid against each other and push up the eventual "winning" price. The Scottish Executive calculates that £9m annually has been wasted on surveys that did not lead to purchases under this system.

A new law, passed in the autumn and coming into effect next year, means that a seller will commission one comprehensive survey that is shown to all potential purchasers when they view the property. The cost is reimbursed by the eventual successful buyer.

Estate agents and surveyors argue that this may lead to properties failing to get higher prices encouraged by the old system - which is precisely the point, argue the politicians.

Although estate agents' offices do exist in Edinburgh, the majority of homes still sell through the Edinburgh Solicitors' Property Centre, an umbrella name for solicitors who do the selling as well as the conveyancing in this part of Scotland.