Don’t delay – look to sell today.
That’s got to be the message to anyone in Edinburgh, Lothians and Fife who is thinking of putting their house on the market.
The performance of the local property market since the start of the year is strongly suggesting that there really is no need to put off any decision to list a house for sale, or think to delay until later in the year.
Why is that? Firstly, I think prices will rise this year. So if you are looking to sell and buy, waiting until later could mean that prices become unaffordable – and that greater competition from a more active housing market could mean you miss out on your ideal home.
Secondly, the sooner you own then the sooner you’ll be paying a mortgage off (repaying some of that capital to reduce your loan) as opposed to paying rent to a third party. Part of what you repay is adding to your capital.
Thirdly, interest rates and, accordingly, mortgage rates remain very low and therefore you can buy now and lock into a great rate for several years (depending on your circumstances).
And of course, it can’t be ignored that most sellers want to move for a genuine reason – a growing family, relocating job, bigger property, downsizing etc – and those personal circumstances dictate when moving is right for you.
Across Edinburgh, Lothians and Fife - and indeed the rest of Scotland, with exclusion of Aberdeen because of the oil price issue - sales remain buoyant with the number of listings and number of sales both exceeding the figures for the same period at the start of 2014.
At Warners we’ve already sold more than 200 properties to the year to date – underlining the impact of greater consumer confidence in the property market.
We’ve seen more people keen to move and that’s probably as a result of the stability of the UK economy in comparison with many other countries, interest rates remaining low, and a new tranche of Help to Buy funds being released. There have certainly been more properties which have had competition and closing dates than in previous years.
I think prices will rise but slowly and steadily over the year. The one question mark which cannot be answered without a magic wand is the General Election. Elections always produce a period of uncertainty but let’s remember that is short-term uncertainty which might affect the market a week or two before the election – traditionally as it has done at election time. However, given we have a devolved Parliament in Scotland, there shouldn’t be too many unexpected surprises post the election.
Finally, we need to consider what impact the forthcoming Land and Business Transition Tax (LBTT), or new Stamp Duty, will have on the performance of the market place over the spring period once it comes into being on April 1.
The position with LBTT, as evidenced over the past few months, is that those who have a purchase price, which means the cost will increase post 1 April (those buying for £333,000 or more),have been trying to complete their purchase before that date.
Given the recent announcement by the Scottish Government of the adjusted rates (directly in response to George Osborne’s budget of November 2014 which reduced costs UK-wide), only those paying more than £333,000 will pay more in Scotland.
Conversely, with the new starting rate for the LBTT now being £145,000 – in Scotland in many cases (up to £325,000) it will be £400 less than in England from 1 April. Clearly, therefore, there has been a push for high level purchase transaction to complete before 1 April – but the majority of the market has not been affected.
For those going on the market now, it is unlikely legal completion will take place before 1 April anyway. It is unlikely, unless someone lives adjacent to the English border, that a buyer would be choosing between potentially buying in Scotland or England. Even then, it would only make a difference of note if buying for more than £333,000.