The first interest rate rise in over a decade has shown no signs of impacting Edinburgh’s surging property market. Properties in Edinburgh and the Lothians are experiencing increasingly high demand, and competition amongst buyers has lead to not just fast sales, but selling prices that are frequently well in excess of their Home Report valuation, say leading industry experts Warners.
In the three months from September to November, properties sold through Warners achieved an average of 5.6% over and above their Home Report valuation – more than double the average premium of 2.6% during the same period last year.
And properties in the capital are selling more quickly than they were last year, too. Homes that were sold over the last three months spent an average of just 18 days on the market. That’s down from an average of 21 days for properties sold between September and November in 2016.
David Marshall, Operations Director at Warners Solicitors & Estate Agents, said: “Although the Bank of England increased interest rates for the first time in more than a decade last month, mortgage rates are still at very low levels by historical standards, especially for buyers who have a reasonable deposit in place.
And while the supply of homes for sale is comparatively low, demand amongst buyers has risen, fuelled by low interest rates and an improving economy.
“It means we have a market that is certainly favouring sellers, which is leading to these quick sales and rising selling prices that most areas are seeing.
“Indeed, the figures for the last three months are consistent with what we have seen throughout 2017.”
Part of the problem is that Edinburgh is experiencing a musical chairs-style market whereby those looking to sell their properties are reluctant to put their home on the market until they’ve found their ideal home to replace it with.
David explained: “Unfortunately this means that we have a situation in which the supply of properties to the market is held back by a lack of properties for sale, exacerbating the problem for buyers.”
But, as we approach the New Year, change is on the horizon and we should expect to see signs of settling in the unflinching market.
David said: “In the first instance, the fact that the market has been so favourable for sellers over the last two years will encourage more people to test the water, and put their property up for sale, which will improve the supply of properties to the market.
“At the same time, buyer demand is unlikely to be as strong in 2018 as it has been over the last two years. Interest rates are likely to inch up, which will push up mortgage repayments and reduce buying power.”
Warners operates three property centres in Edinburgh and is one of the capital’s leading estate agents for property transactions
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