Stability and Growth Lie Ahead for Edinburgh Period Property
With the Labour government settling into Downing Street and the Bank of England (BoE) base rate reduction reenergising buyer confidence, Edinburgh’s prime property market is showing welcome signs of increased interest. In addition, the combination of more attractive mortgages, continuous strong performance of prime property and another potential base rate cut has created a more fertile environment for growth in the period property market. Read on for our full assessment and what it means for Edinburgh period property sales.
A Stable Environment for Growth
It’s no secret that 2024 started off with a few challenging months for the UK property industry. Higher interest rates and a degree of uncertainty around the policies of the previous government caused potential period property buyers to hold back on scheduling viewings and making offers. At the same time, potential sellers were thinking twice before putting their homes on the market.
Over the past couple of months however, things are looking more positive and the market is starting to reawaken. The new Labour government may have been facing a few challenging weeks, but there is a greater sense of predictability and stability returning now the political landscape is settling down.
In short, we are experiencing a much more favourable environment for Edinburgh period property sales. As a result, we have already seen buyer and seller interest increasing.
Prime Property Demonstrates Resilience
As important as these positive developments are, it’s worth remembering that prime properties have always resisted short-term market trends in Scotland in general and Edinburgh in particular. This is especially noticeable when you consider properties with a value exceeding £1m.
In 2023, the New Town and the West End recorded the largest number of sales of properties over £1m, propelling the EH3 postcode to the top in the capital. Areas like Morningside and Bruntsfield, both known for stunning period property, followed suit, and the likes of Marchmont and The Grange were not far behind.
The resilience of this segment of the Edinburgh property market demonstrates the timeless appeal of period property with prospective buyers.
Lower Interest Rates Revitalising the Mortgage Market
The BoE’s decision to lower its base rate at the beginning of August reenergised the mortgage market almost instantly. While some lenders had started dropping their interest rates as early as July in anticipation of the announcement, August brought a flurry of attractive deals. Potential buyers now have access to a selection of five-year-fixed deals below 5% from both high street and specialist lenders. In fact, the number of deals offering interest rates below 4% has grown, too. While the lowest-interest deals may come with higher fees, these are some of the most competitive rates we’ve seen for several years.
Lower interest rates and attractive mortgage deals are two of the key drivers of buyer interest, and we’ve seen the effect of the changes in the level of interest from qualified buyers. As a period property owner considering selling right now, these developments are strong arguments in favour of listing your property.
Looking Beyond Edinburgh City Limits
Historically, Edinburgh has created its own microclimate for property sales and investment. As the Scottish capital and a financial centre, the city regularly outperformed the property market in the UK and even Scotland in general.
More recently, it’s not only the city itself that has seen strong growth. Sales prices for homes in neighbouring East Lothian also grew significantly between 2023 and 2024. While research shows price increases across all types of East Lothian properties, detached homes stand out with sales prices outperforming the Scottish national average by more than one-third.
Some of East Lothian’s most coveted period properties fall into this category.
Looking Ahead to Autumn
In most years, spring and summer are considered the prime seasons for buying and selling property. This year, we predict that activity will pick up in the autumn. The current increase in buyer interest and more attractive interest rates is only one indicator.
Economists also predict one more base rate cut later in the year, assuming that inflation remains low. If the Bank of England does make that cut, lenders will likely follow suit and reduce interest rates even further, paving the way for more potential buyers looking for period property.
Lastly, we started this update by talking about how an atmosphere of political stability has infused a heightened level of confidence in the property market. We hope this is set to increase even further once Rachel Reeves, the new Chancellor of the Exchequer, delivers her first budget on 30 October.
Conclusion
After a challenging first few months of the year, all signs are pointing toward a period of stability and growth for Edinburgh period property sales. Could this be the right time for you to list your property for sale?
We’re here if you’d like more information or want to discuss your specific period property. Contact our Director, Fiona Vernon on 0131 699 0333 / 07900 605674 or email [email protected].
