Optimism interest rates may have peaked. Average sale prices around valuation. Uncertainty in terms of inflation and the commodity price.
Combined, these statements illustrate the multi-faceted nature of the North-east housing market: perfectly demonstrating why people are finding the decision to buy, sell, or stay put more complex than it was, even a couple of years ago.
Laura Ross, who recently moved into the estate agency manager role at Ledingham Chalmers Estate Agency (LCEA) says there is promising activity in the residential market — with good deals to be done — but that uncertainty has, unsurprisingly, given both buyers and sellers food for thought.
The Registers of Scotland Property Market Report 2023 says while the average price in 2022/23 in the city was £171,330 — below the 2014/15 peak of £214,519 — the residential property sales market value remains the third highest in Scotland after Edinburgh and Glasgow.
Mrs Ross said: “The reality is the local market is holding up relatively well.
“Homes are still selling, the easing of inflation means there’s a degree of optimism in the mortgage market and the sale prices we’ve seen at LCEA this year are consistently higher than the area’s average.”
For example, she says in September 2023, the average sale price of a city home was £157,429 and £203,043 for a suburban property, whereas the LCEA averages were £195,107 and £243,318 respectively.
What kind of homes are selling?
Mrs Ross adds that, as ever, homes needing very little work remain popular with buyers.
She said: “Given the cost of living, people have less income to spend on, for example, refurbishing properties, so we’re seeing purchasers predominantly look for homes that need very little work.
“In terms of property type and location, homes with the lowest average time on the market are mid-size properties with two or three bedrooms. Popular areas to buy include the city centre, Bridge of Don, Westhill, Portlethen and Banchory.
“Aberdeenshire towns like Banchory have consistently done well over the years; however, with many businesses now offering hybrid working, clients are telling us they’re willing to move further out of the city centre than they might have before because they have that option of working from home for part of the week.
“This means lower commuting costs too, which is particularly helpful at the moment when budgets are stretched.
Mrs Ross adds recent examples of homes going under offer quickly include a two-bed home in Bridge of Don (a week. ASPC figures show the average time on market for a two-bed detached home in Bridge of Don is 151 days) and a four-bed, seven public room home in Ballater (three working days. ASPC’s statistics show the average time on market for a four-bed detached home in Ballater is 111 days).
Laura Ross, recently appointed Estate Agency Manager at Ledingham Chalmers Estate Agency (LCEA)
The mortgage picture
For people buying, Martin Williams, independent financial advisor with Ledingham Chalmers Financial, said mortgage lenders were quick to reduce fixed price products following the Bank of England’s hold on interest rates in September. He adds the average five-year fixed rate is now around 5%.
Mr Williams said: “This shows lenders feel interest rates are close to — or have reached — their peak and are trying to attract customers back to the housing market. That’s positive, but we have to bear in mind the cost of borrowing is still more expensive than it was at the end of 2021 when the average two-year, fixed-rate deal was around 2.3%.”
He adds existing homeowners looking to move or remortgage with a large deposit of around 40% of the property’s value, or a lot of equity in their home, will be the ones most likely to be able to access the most favourable deals.
In conclusion
Mrs Ross concludes: “We can take a degree of reassurance from the statistics as well as the signs of optimism we see in the market.
“Of course, we can only wait and see what happens with inflation, interest rates and mortgage deals, but for now keenly priced, well-presented north east properties are selling well.”
If you’re considering selling, please get in touch with the LCEA team. And, if you’re buying, here’s where you can view LCEA’s properties for sale.
Ledingham Chalmers Financial Limited is authorised and regulated by the Financial Conduct Authority (Registration Number 196274).
As a mortgage is secured against your property, it could be repossessed if you do not keep up mortgage repayments. The Financial Conduct Authority does not regulate some buy-to-let mortgages.