An announcement on 15 November 2016 by the Council of Mortgage Lenders indicated that mortgage costs had reached a historic low in September 2016, representing good news for property buyers and sellers across East Central Scotland according to local solicitor estate agents.
The Council of Mortgage Lenders (CML), the main trade body representing UK mortgage lenders, reported that mortgage costs relative to household income reached a historic low in September, for both first-time buyers and home movers, at 17.8% and 17.7%, respectively.
These record low mortgage costs come on the back of the Bank of England’s Monetary Policy Committee voting unanimously on 4 August 2016 to cut the Bank Rate (commonly referred to as The Bank of England’s ‘Base Rate’) to 0.25% from its already historic low of 0.5%. For people on variable rate mortgages, many of them will have benefited from seeing this cut reflected in the interest rate that they pay on their mortgage.
CML Director General, Paul Smee, stated: “Mortgage affordability reached an historic low in September, for both first-time buyers and home movers, which partly reflects the repricing of mortgages following August’s base rate cut.
“This should help turn strong appetite for home-ownership into a reality as we approach the closing months of the year.”
Earlier this year, Halifax, the UK’s largest mortgage lender, revealed that the number of people buying properties for the first time was on the rise. Interestingly, although mortgage repayments are now more affordable, the typical loan size decreased to £133,000 in September 2016 from £136,400 in August.
Commenting on how this increased mortgage affordability might affect the property market in East Central Scotland, Robert Carroll, Managing Director of MOV8 Real Estate, a leading firm of estate agents and solicitors based in Edinburgh said:
“As long as rates remain at these historically low levels, property buyers and sellers should continue to benefit from more affordable mortgage products. Mortgage availability remains strong so anyone who is thinking of buying or selling a property in East Central Scotland can only be encouraged by the information released by the CML this month.
“Buyer demand remains very high towards the end of 2016, with a combination of mortgage availability and the usual, seasonal dip in the number of properties coming to the market meaning that the market remains highly competitive. This is good news for property sellers who will experience less competition from other, similar properties on the market.
“We would encourage anyone who is thinking of selling their property to take advantage of the current market conditions and some of the competitive deals being offered to property sellers in Winter to encourage them to take the plunge at a time of year that is, somewhat unfairly, not seen as the ideal time of year to get your property onto the market.”