It seems like spring is finally here and, with the worst of the cold weather now hopefully behind us, let’s take our monthly look back at what has been happening in your local property market.
A busy start to the year
March is traditionally the month when we really see activity among home movers really get into full swing and that has certainly been the case this year. On the back of a record-breaking February when we saw more sellers bring their home onto the market with MOV8 than in any month since we opened our doors way back in 2007, activity among buyers and sellers continued to rise in March.
There’s no question that the impending introduction of Land & Buildings Transaction Tax (LBTT) in April has helped to buoy activity further-up the ladder, but we have also seen a substantial rise in the number of homes changing hands at the more ‘affordable’ end of the market, though that expression is all relative in the east of Scotland! Mortgage availability has steadily improved in recent years and this, coupled with continued low interest rates, has helped a number of first time buyers to get onto the property ladder.
This can only be good news for the long-term health of the market as sales of smaller properties help to fuel activity further up the property ladder and we expect activity to be brisk throughout 2015.
House prices have also shown signs of picking up recently. In the three months to February ESPC reported that the average house price in Edinburgh rose by 8.7% annually to £221,733. That’s the highest annual rise in over four years. These rises haven’t been universal of course: certain sectors of the market, such as family homes in highly desirable residential areas, have been selling for considerably more than the asking price as Closing Dates have become more of a regular feature of that sector of the property market. Looking ahead, it will be important that the number of sellers coming onto the market continues to rise to ensure that house price inflation eases in the coming months.
Budget brings promise of Help-to-Buy ISAs
The major announcement in the Chancellor of the Exchequer’s last Budget before the General Election that will have been of interest to those thinking of moving home came in the form of Help-to-Buy ISAs which are aimed at giving first-time buyers a helping hand getting onto the property ladder.
The initiative, due to launch in Autumn 2015, will see the Government contribute up to £50 for every £200 a first-time buyer saves. The buyer can put up to £200 per month into the account with the Government providing a maximum contribution of £3,000 on £12,000 of savings. Outwith London, buyers will be able to put these savings towards buying a home worth up to £250,000.
It probably goes without saying that this will be welcome news for anyone looking to get on the property ladder. Although first-time buyers have steadily returned to the market over the last 18 months, saving the deposit required to secure a mortgage remains a significant obstacle and this level of assistance will ease the burden for many.
Unfortunately the initiative will not address what is arguably the major underlying issue facing the UK property market. With life-expectancy rising and the average household size falling, demand for housing is rising quicker than the rate at which we are building new homes and that inevitably puts an upward pressure on prices.
In Edinburgh, for example, the number of news homes being built in recent years is only around a third of that which would be required to keep pace with the projected rise in the number of households in the city.
While today’s announcement provides something of a sticking plaster to the affordability issue, I’d hope that in the months and years ahead we will see more being done to help to stimulate development of the affordable new housing that will be required to ensure that the market remains healthy and sustainable in the future.
Get in touch
As ever, if you’re thinking of buying or selling a property or if you have any questions, please do feel free to get in touch with our property experts today on 0345 646 0208 and one of our team will be delighted to help you.