An Edinburgh property specialist has claimed houses are still flying off the shelves despite mortgage rates hitting a 12-year high in recent weeks.
The interest rate on a standard five-year fixed rate mortgage has exceeded six percent for the first time since 2010 thanks in part to the new Westminster Government’s mini-budget last month.
The Bank of England said: “Higher interest rates make it more expensive for people to borrow money, encourage people to save and, overall, mean that people will tend to spend less.”
However, “it isn't all doom and gloom” according Edinburgh’s Stuart Radmall. The local property specialist with RE/MAX Scotland believes the local housing market will remain stable despite dire national predictions.
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“I think the rising interest rates will make things more difficult for people, but during the Margaret Thatcher administration, interest rates were at 17 percent,” he said.
“We’ve had it easy for a long time, but we’re not yet in a bad position like we’ve been in the past. Regardless of interest rates, if people need and want to move, they will.”
New property market data aligns perfectly with what Stuart said he is currently seeing locally in Edinburgh. “One in three properties receive an offer one hour after viewing,” he quoted from MPowered Mortgages data.
“New research suggests that, in 2022, nearly a third of properties now receive an offer in an hour compared to only 7 percent in 2018.”
The data also revealed that properties receiving an offer within a day has risen from 26% in 2018 to 48 percent in 2022.
Stuart believes that Edinburgh’s housing shortfall will actually save the market from a drastic slow down based on supply and demand principles. Because supply is so low, he theorised that market demand will remain high.
Stuart also believes rising fuel bills and utilities will drive empty nesters and those with large homes to consider downsizing to save on heating, which he believes will in turn fuel the market and ensure the market remains stable.
However, Stuart does believe change is in the air, and he expects to see the market slow down near the end of year as current mortgages in principle go out for renewal or expire.
“At that point I expect to see things slow down a bit, but it won’t be a repeat of 2008. The banks haven’t made a mistake this time, the market is just responding to the current situation,” he said.
“Since 2019, the market has been flooded by people looking to buy. Properties have been going for 12-15 percent above home value. I expect things will go back to normal soon and we’ll see properties selling closer to home value again.”
Stuart can be found on Facebook here.
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