The 2018 Edinburgh property market is shaping up to be much the same as 2017. Ultimately, there is a chronic shortage of supply, especially at the lower end/entry level, with demand for traditional tenement flats in popular parts of the city far exceeding availability.
The high levels of demand impacts on the market in two mains ways:
- Buyers are forced into offering premium prices, often in excess of 10% over Home Report value in order to successfully secure a property.
- Many owners are less inclined to market their property for sale until such time as they have secured their next property, with a view to only market when they know they will sell well and sell quickly.
Both of these factors reduce supply and turn the market in to something of a vicious circle.
2018 Edinburgh property market
The increase in the base rate of interest last year has had little, if no impact on mortgage availability/borrowing. The small increase in the base rate, which has been passed on to mortgage interest rates, has had a very small impact in monthly repayments and has not in any way dampened borrowers’ enthusiasm to borrow as much as they can. Additionally, this means that they can put in the minimum deposit that they are able to, which can, on occasion, give them the extra funds required to pay the premium prices necessary to succeed.
There is also a significant increase in the amount of parental money being gifted/lent to children to enable them to get on to the market and the age of your average first time buyer continues to rise.
Whilst the Brexit negotiations will continue through 2018 it is difficult to know ultimately what impact those negotiations and the actual separation from Europe will have on the 2018 Edinburgh property market.
It is clear that the closer the negotiations get to the point at which separation is to occur, more people will be nervous about transacting and less likely to buy/sell. It is likely any negative impact will be short lived if and when it becomes clear, then it is very much ‘business as usual’ for the Edinburgh property market.