Rate Rise on Horizon Could Restore Balance to Edinburgh Market
Monday, July 17th, 2017
on behalf of Warners Solicitors and Estate Agents
SPECULATION of the first interest rate rise in 10 years could help the Capital’s property market balance, a leading Edinburgh estate agent has predicted.
Despite conditions in Edinburgh and the Lothians continuing to favour sellers, Warners Solicitors and Estate Agents has suggested that we could see a greater balance between supply and demand over the remainder of 2017.
A decade has passed since the last interest rate rise, but the likelihood of the Bank Rate rising from its current low of 0.25% has risen recently, with three of eight members of the Bank of England’s Monetary Policy Committee voting for an increase to the base rate last month.
Although any increase is likely to be small, David Marshall, Operations Director at Warners Solicitors & Estate Agents, believes it could help many buyers by reducing the number of homes selling considerably over valuation.
He said: “At this stage it remains likely that overall conditions will continue to favour sellers, but we expect to see a greater balance between supply and demand over the remainder of the year.
“Although any increase in interest rates is likely to be modest, this would still serve to reduce homebuyers buying power, dampening demand somewhat and reducing the number of cases where properties sell for substantially above Home Report valuation.
“Coupled with a rise in the number of homes coming onto the market, we expect this to mean that we will see more moderate house price inflation in the coming months, with prices rising by around 3% annually as we head towards the end of the year.”
During the second quarter of 2017 Warners recorded more than 230 sales, an increase of over 30% on the number sold during the same period in 2016.
With the number of property listings through Warners up 24% compared to last year’s figure, a continuing supply of houses being brought to the market could finally help ease the upward pressure on prices.
David added: “Though conditions continue to be favour sellers there have been tentative signs recently that the market is becoming more balanced, and that will be welcome news for many buyers who have been battling fierce competition over the last 18 months.”
Warners operates three property centres in Edinburgh and is one of the capital’s leading estate agents for property transactions.
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