As the impact of the Help to Buy scheme is unfolding, David Cameron has revealed that a total of 2,384 families so far have applied for a 95% mortgage which is backed by the Governments initiative to help those with low deposits get onto the housing market.
It is believed that a fairly high percentage of these individuals are first time buyers who previously did not have the necessary deposit to support a lower loan to value mortgage. However, there are also many applications from those wishing to move up the property ladder who currently have low equity in their existing home and still need to a 95% mortgage to help make the move.
So What’s The Likely Impact?
Registers of Scotland have reported that Scottish property sales have enjoyed a sharp rise during the period July to September with a 22.5% increase on the same period last year. Kenny Crawford, Commercial Services Director said “This quarters figures are one of the strongest indicators yet of a revitalised Scottish property market.”
Mortgage approvals across the board are also up with the Bank of England reporting that lending during September hit its highest level since February 2008 with 66,735 home loans being approved. In answer to the data released by the Bank of England, a senior UK economist at HIS Global Insight warned of a “mounting danger that house prices could really take off over the coming months.”
Is This Being Reflected In Edinburgh And The Lothians?
It seems so – according to the most recent data from Edinburgh Solicitors Property Centre there was a 42.5% increase annually in the number of homes sold in the area which includes Fife.
New homes coming onto the market also increased and was up 14.9% annually.
Stronger activity has led to a rise in the number of sellers who are being advised to market their home at an ‘Offers Over’ price which reflects the demand in particular areas of the market.
What About Price Increases?
It is widely reported in all areas of the media and from various analysts that prices will undoubtedly rise over the coming months and years.
However, we recognise that an increase in property prices next year will do no favours to those wanting to get onto or move up the ladder.
You may get more for your own property but will pay proportionately more for your new place if you are moving up the market. At the moment prices are stable with indications of movement in an upward direction – but with major price increases on the horizon, now is a good time to make a move.
Conversely, if you are trading down to a smaller property or selling up and not purchasing the best advice may be to wait while market forces reassert themselves and prices take off.
If you are thinking of a move, don’t be put off by the fact we are approaching Christmas – there has never been a better time to get the ball rolling. Why not call us and ask for a pre-sale valuation of your own home and get ready for that big move in 2014.