Scottish Housing Market

The Scottish housing market continues to show positive signs of improving as sales increase. Research completed by the Royal Institution of Chartered Surveyors (RICS) found that new buyer enquiries and sales had risen continually between January and April 2013.

A positive consumer outlook has a large part to play with confidence in the Scottish housing market returning. Only 1 in 20 people think the value of properties will fall, whereas 25% believe prices will rise in the next year.

It’s positive news for first time buyers who can enter the market with confidence that their investment is likely to be secure. This, coupled with the excellent first time buyer mortgages available, is helping to kick-start the mortgage market.

95% LTV First Time Buyer Mortgages

First time buyers entering the market are a positive sign. The increased demand to purchase properties will enable other homeowners, who are currently trapped between properties, to sell their house and move up the ladder.

The inability for first time buyers to buy their home has directly influenced the rental market where demand has been exceeding supply, which in turn has increased the cost per month of rental properties. The average rental cost increased again last month by 2.4% to £793.

95% first time buyer mortgages have been available for some time however the interest rates available with a 5% deposit started around 7% APR. But, this has changed. A first time buyer mortgage with a 5% deposit is now reduced to as low as 4.5% with some providers.

Mortgage Availability

The overall rise in mortgage availability is particularly evident for borrowers who have a 25% deposit. This is because competition between lenders is growing and interest rates are declining as money is being made available through Government schemes, like Funding for Lending.

With the required deposit as low as 5% of the value of the property, a low monthly interest rate and consumer confidence growing, it’s now financially appealing for first time buyers to enter the property market. In turn, homeowners with a 75% loan to value mortgage can benefit from lower interest rates too.

Overall, It all works together to help rejuvenate the housing market.