The Courier & Advertiser (Angus and Dundee)
How rate rises are affecting house sales
Anumber of for sale properties across Tayside and Fife are being returned to the market with sales having fallen through.
Earlier this month, the Bank of England increased the base rate of interest to 3% – its biggest rise in more than three decades.
But what does this mean for the Tayside and Fife property market? The Bank of England rate increase has meant some buyers have had to withdraw from their property purchase as mortgage deals became too expensive.
Tayside Solicitors Property Centre manager Lynne Hill said: “In the current climate, there is more of a risk that deals which were done prior to the current situation evolving, might founder.
“We can confirm that of the properties that have reappeared under the ‘remarketed’ banner, a significant number have once again gone under offer quickly.”
According to Thorntons Property operations manager Yvonne O’connor the rate rise was lower than anticipated.
She also said a very small proportion of buyers have missed out on purchases due to more expensive mortgages.
Meanwhile, Blackadders director of property services Martin Paterson said the interest rate could rise even further,
“Many experts have estimated this situation could result in a lowering of values for residential homes,” he said.
“I think property values will not crash, as some predict, but will start to attain a level closer to that of the home report.”
Fife Properties managing director Jim Parker believes the increased interest rates and inflation will not impact the housing market significantly.
He said: “We are still at extremely low interest rates in comparison to other periods with 17 out of 20 homeowners on long-term fixed rate deals at an average of 2.14%.
“Homebuyers have been stress tested at 6-7% mortgage rates since 2014, which will mean we will not see a significant number of houses being dumped on to the market.”
Gilson Gray partner Lindsay Darroch expects the current situation to worsen and turn into a buyer’s market.
“I anticipate a steep drop off in properties coming to market followed by forced sellers, those who need to sell for personal circumstances,” he said.
“This will further cause the gap between the offers over price and achieved price to narrow. Expect more fixed prices.”
As demand across Tayside is still high, RSB Lindsays partner Chris Todd sees house prices stabilising rather than dropping.
“Lenders are bringing fixed rate products back into play, albeit at higher rates of interest from the historically low levels they have been at over the past decade,” he said.