Edinburgh’s property market in 2017 is set to bring opportunities that will bring benefits to both buyers and sellers. Rising prices and demand are expected to be maintained into next year, but at levels where buyers, including first time buyers, can have more than a decent chance of securing their preferred property.
David Marshall, Operations Director at Warners, said that while 2016 was characterised by demand from buyers outstripping the supply of homes - allowing Edinburgh to experience the strongest sellers’ market for almost a decade and a corresponding surge in selling prices and selling times – there are signs of change in 2017.
He said: “There are some tentative signs that more sellers may now be ready to put their home on the market - and looking to act early in 2017.
“Once these sellers take the plunge in the new year it will help to redress the balance between supply and demand in the market. This will, in turn, reduce the upward pressure on house prices and make conditions a little easier for buyers.
“For first-time buyers, this increase in supply and corresponding cooling in house price inflation will be welcome news. The high level of competition amongst buyers, coupled with lenders’ reluctance to offer mortgages for more than the Home Report valuation, have made things challenging.
“With more properties coming onto the market it will mean that buyers may not have to bid quite as much to secure a property, making it a little easier for those looking to take their first onto the property ladder.
“For sellers, whilst they may find conditions a little less favourable in 2017 than was the case this year, when they come to buy they will probably find that they are able to secure their new home for less than would otherwise have been the case.”
David added that the expectation at this stage is that buyer demand will remain strong throughout 2017. Interest rates are at historically low levels and it is widely expected that they will remain low in the coming year making mortgage repayments more affordable. The UK employment rate is projected to grow steadily in 2017, albeit at a slower rate than we saw this year, and this will help to bolster buyer demand in the coming 12 months.
On the downside though, inflation is expected to pick up in 2017 and remain ahead of the Bank of England’s target of 2% for much of the year. This will naturally put pressure on people’s disposable income in the months ahead.
David added: “On balance, it is expected that house prices across Edinburgh and the Lothians will continue to inch upwards throughout 2017 with an annual rise in prices of around 3% across the region.
“There will be a moderate increase in the supply of properties coming onto the market but, with demand already outstripping supply by some distance, this will simply serve to rein in some of the more rapid house price rises that we saw this year.”