At the start of May, some adverse news came for the UK housing market. It was found that some lenders were raising interest rates on new fixed mortgage deals. After gains were made in average house prices and mortgage rate decreases, this wasn’t the best news. This is especially because over 1.5 million homeowners were expected to remortgage in 2024. Rates were gradually coming back down to Earth before this news.
Luckily, it didn’t take long for a course correction. Whether it’s to reflect the current economic situation or to compete, some lenders have now cut these rates. This will be good news for homeowners and prospective buyers in Edinburgh. Also helping has been the more grounded situation for house pricing and valuations.
Cutting rates should help some homeowners
As the report noted, some 1.5 million people are looking to remortgage in 2024. Anyone on higher rates forced through over the last few years will certainly be looking forward to lower rates when it’s time to remortgage. Reports say that three of the biggest banks in the country have opted to reduce their rates on fixes of up to five years. Barclays Bank, TSB, and HSBC have all made reductions of between 0.10 and 0.13 per cent.
Average five-year fixed rates remain at 5.49 per cent. With the above cuts, some borrowers can now get rates of 4.34 per cent with a 40 per cent deposit. Still, some will already be struggling under the weight of current mortgage deals and possibly facing repossession. Now, there are a few ways to stop house repossession and all of them require communication with the lender. One of the main ways is to reduce payments or set up a new plan.
Alternatively, those facing repossession after trying to negotiate can try to sell their home fast. This way, you tend to get a better price than the lender would. Auctions for repossessed houses tend to be prime ways to buy cheaper properties in Edinburgh. At the time of writing, without knowing the causes for the auctions, there was a four-bed villa in EH5 at a £275,000 guide price and a seven-bed maisonette at £350,000.
House prices decline starting to climb back
In 2007, the average house price peak in Edinburgh was close to £430,000. Now, it’s sitting some 20 per cent lower than that value, making it a much more affordable city. The average is now sitting at around £335,000. It’s a decent average price, especially when you consider that it’s the capital of Scotland. However, it’s not expected to stay at this price for too much longer.
Detached homes have been surging in Edinburgh. Naturally, these are the most coveted and expensive builds. Still, from February 2024 to March 2023, the value increase was close to crazy. They went up by an average of £1,000 per month. Now, the average price sits at over £722,000. Glasgow and Midlothian experiences similar surges. Other properties didn’t see the same value surge, but house prices overall have been on the rise.
With mortgage rates going down and house prices going up, residents of Edinburgh can seek to capitalise on their properties or, at least, get less expensive deals.
Leave a Reply