First-time buyers should be looking to snap up a property at today’s bargain prices and take advantage of a unique situation which has never before arisen in the Edinburgh property market.
The ELPG group, which is made up of the five leading solicitor-estate agents in Edinburgh and the Lothians, has advised first-time buyers to take advantage of the chance to secure their first-choice property at below its fixed price.
The Edinburgh market has been rising year after year with prices increasing by an average of 10% per annum and in, one year, by by as much as 22%. However, for the first time since ESPC records began, prices have dropped in recent months and are currently standing at an average level of around 10% less than their height in the third quarter of 2007.
As sellers of properties are waiting to receive an offer before purchasing, there is currently a huge choice available to first time buyers – and competition between sellers has this a buyers market with bargains to be had.
The ELPG says that forward thinking sellers are prepared to consider lower offers because they know that they are then free to offer reduced prices further up the market in order to compensate for the drop they take on their sale.
Recent figures from the ESPC have shown that 75 per cent of fixed price properties have been sold for less than the fixed price, indicating that there has never been a better time to consider purchasing a home.
But the group, which consists of Warners, Neilsons, Drummond Miller, Leslie Deans & Co and the Lints Partnership, warns that a tipping point could be reached soon – leading to a surge in demand that will immediately create more competition for homes and drive prices back up.
Scott Brown, Senior Partner of ELPG member firm Warners, said: “The respected Centre for Economics and Business Research predicts that in the UK after price falls, house prices will surge by 2011 wiping out recent falls. This will create a substantial profit for buyers prepared to enter the market now.
“A 10% drop on a flat at £150,000 is of course £15,000, and as the ESPC figures show, in some cases it’s possible to pick up a property substantially below the fixed price,.
“At the moment, there is a far greater supply of properties than demand, which means there’s more chance you will get your first-choice home if you buy now.
“If you had been buying this time last year, when the market was at its peak, you would have been competing against a dozen other people and would have had to pay well over the asking price to secure your first-time property. Now not only are you very likely to be able to secure your first choice property, you may well be able to secure it at below the fixed price.”
Scott argues that there are currently plenty of first-time buyers with deposits in place and adds that many of the major lenders are offering mortgages of up to 90 per cent – making buying a property an attractive, and easy, prospect.
He added: “It’s a common misconception that first-time buyers have been priced out of the market, by the withdrawal of 100% mortgages. Recent research by the ESPC has shown that the vast majority of people attending their first-time buyers evenings already have deposits in place and there are many good mortgage deals out there.
“Lenders such as RBS, Dunfermline, Leeds, Northern Rock, Halifax, C &G and Lloyds TSB are all offering 90% mortgages, while others like Bristol & West and Bank of Ireland are offering ones of 95% with a guarantor.
“Even those people without a deposit can receive help through the government’s LIFT scheme or look to go into co-ownership with friends, family or the ‘bank of mum and dad’.
“The market is down at the moment but that will not last forever and with the Bank of England tipped to drop interest rates by 1% before Christmas and with base rate predicted to fall to as low as 2% next year the answer to the question of whether to buy or rent becomes obvious. Rents in Edinburgh are increasing whilst the cost of your mortgage is likely to fall very quickly in coming months.
“Add to this the fact that if you buy now you could be celebrating Christmas in your new home, and it’s clear that purchasing property is a secure investment.”
Issued on behalf of the ELPG by the Holyrood PR. For further information, contact Adrian Mather on 0131 561 2244 or [email protected]