Short Term Developments vs Long Term Growth
Looking back over the past month, it’s hard to see one single trend in the property market. The Bank of England reduced the base rate, but some lenders increased the fees associated with their mortgages. Slightly higher-than-expected services inflation also had experts wondering what would happen with the coming BoE announcements.
One thing was clear, though – house prices in Scotland continue to grow. Registers of Scotland published its House Price Index showing that Scottish homes sold for a little over 5% more in September 2024 compared to September 2023. Once again, Scotland outperformed the UK overall.
Moreover, prime properties continue to beat market averages. Semi-detached homes performed best in September, with prices growing by 7%. Detached homes followed closely behind. Buyer interest has remained high due to excellent mortgage availability and choice.
Long-Term Growth Exceeding 20%
There is more good news coming from prime property insiders Savills. The organisation’s research team believes that on average, UK property prices will grow by nearly a quarter of their current value over the next five years. Reasons behind this optimistic forecast include continuous easing of mortgage rates and increased buyer mobility.
As the prime property market, including period property in Edinburgh, has regularly outperformed the UK average, we’re expecting strong growth for the years ahead.
Scottish Budget and the Additional Dwelling Supplement
The end of October saw the UK Labour Government present its first budget statement, and the Scottish Government followed suit with a budget statement last week. Overall, the tone of Shona Robison’s statement was somewhat more optimistic than the Westminster announcement.
However, anyone with a second home or buy-to-let property will have deal with an immediate increase in the additional dwelling supplement (ADS), which has been raised from 6% to 8%. There is no point in sugar-coating this development – it’s a big increase.
Still, there is a chance that the ADS will be lowered once again as soon as Spring 2025. At that time, Scottish ministers are due to review the entire Land and Buildings Transaction Tax (LBTT) legislation, including the ADS, and there are some indications that the scope of the ADS may change.
What Are Mortgage Lenders Doing?
In August, mortgage lenders reacted very clearly to the base rate reduction. Immediately after the announcement, numerous lenders launched highly competitive mortgage products to the market. In November, the reaction was more mixed, with some lenders even increasing rates.
At the beginning of this month, major lenders started dropping rates once again,a lbeit more modestly than they did in August and September. Still, industry experts believe that the overall trend is pointing towards lower mortgage rates in the medium to long term, keeping buyer interest high.
What Does it Mean for Edinburgh’s Prime Property Market?
As we told you in our last update, property market activity increased since August, and we’res still seeing strong interest in adn demand for Edinburgh period properties.
In the very short term, the increase in ADS may put off some buy-to-let or second home buyers. But as a whole, the period property market remains strong. Plus, with solid long-term house price growth continuing fro the rest of the decade, we predict that all types of buyers will remain on the lookout for those one-of-a-kind, characterful properties.
At the same time, it’s more important than ever to market your period property strategically to attract leading buyers to your home. Taking a focused approach can make all the difference when it comes to selling your period property successfully.
Are You Considering Selling a Period Property?
This autumn and winter have been some of the busiest months for selling period property, and there are still a few weeks left in the year.
If you’re thinking of selling now, some time in 2025 or even further in the future, give us a call now. We’re happy to meet you for a cup of tea and an informal chat about how we can help you market and sell your property successfully now, in the spring or in a year.
For more information, to discuss your period property or if you’re looking for your next home in Edinburgh, don’t hesitate to get in touch with us. You can contact our Director, Fiona Vernon on 0131 699 0333 / 07900 605674 or email [email protected].
