As with every new year, potential home buyers will have their sights set on making their move a reality in 2024. Whether you’re keen to step onto the property ladder as a first time buyer or considering selling your home and finding somewhere better suited to your current needs, it's important to empower yourself with as much accurate information as possible.
In this blog post, we’ve interviewed four property experts from across Aberdeen city and shire to share their professional insights into the current climate of the North East property market, and provide helpful tips and advice for buyers and sellers…
Stuart Dunne, Managing Partner at Shepherd Chartered Surveyors
Why do you think people are tentative about buying a property right now?
“Media speculation around rising interest rates has affected confidence over the past year. Interest rates were artificially low and are now back to a more ‘normal’ level and appear to have peaked, however, the press don’t report this and they are still significantly lower than historic highs.
“Similarly, although high inflation levels are now falling too, their peak has also contributed to a knock on public confidence when it comes to buying and selling property. Both interest and inflation rates have created a lot of doubt, and during uncertain times people tend to err on the side of caution and do nothing.
“As normality returns within the property sector and these rates start to fall, 2024 should be a more positive year for buyers and sellers, with transaction levels likely to increase.”
What advice would you give to someone who is looking to buy in the new year?
“I would say it’s very important to be prepared and speak to local experts who can give you the most accurate advice and peace of mind, rather than relying on Google for all the answers. Local knowledge is paramount, so make sure to reach out to professionals within the area, and research locations and areas extensively so you can make the right decision and buy with confidence.
“Setting a budget is another crucial step if you’re hoping to buy a property. You need to know what you can realistically afford and look for properties within that price range to be in a better position to secure an affordable mortgage and keep yourself financially secure throughout the process.”
What are the benefits of buying a new build?
“When you buy a new build home, there’s essentially no maintenance to worry about as everything is fresh and new. This gives you the ability to better control your budget, with no expensive refurbishment or un accounted for maintenance costs to take care of once you’ve moved in. New builds also come with a builder and Professional BuildMark Guarantee. There are often incentives available from the home builder to make your move a little easier.
“Additionally, the energy efficiency of newly built homes is far superior to that of traditional properties, making them cheaper and greener to run. In the wake of the cost-of-living crisis and economic challenges households have faced, being able to save money on your energy bills is a massive bonus, and something a lot of home buyers are now looking for as a priority.”
Key takeaway:
“You buy a home for the long term, there will always be lumps and bumps in the economy over the full mortgage term which is typically around 25 years. It doesn’t matter when you buy, these events will always occur, and holding off will unlikely give you any real benefit in the longer term. The local market is performing relatively well so it’s important not to let media speculation put you off from purchasing a property.
“Property is of good value in the North East of Scotland in comparison to other areas. We’re seeing a more stable environment with falling inflation and interest rates starting to come down also. We don’t expect a huge amount of market fluctuation locally over the next year. 2024 certainly looks as though it will be a more positive one for the property market.”
Chris Comfort, Partner at Aberdein Considine
Do you think mortgage rates will go down?
“Mortgage rates have gradually reduced within the last few months - and although it is unlikely we will see mortgage rates as low as previous years, it is anticipated that these rates will continue to reduce gradually. It is currently being predicted that rates will likely fall to somewhere between 4 and 4.5% within the next 12-18 months.
“Many potential purchasers may be currently renting or considering going into rented accommodation until the mortgage rates come down. However, the rent for properties coming on to the rental market has increased by up to 15% to 20% in some areas, and it is likely those already in rented accommodation will experience rent increases too.
“Whilst there is uncertainty over government plans for the rental sector, it is anticipated that it may become more economical to pay for a mortgage rather than rent. As a result, this could lead to an increase in first time buyers in the market, which was the primary drop off in new mortgage applications reported this year.”
What advice would you give to someone who is looking to buy in the new year?
“Before considering any properties, make sure you have met with a financial adviser to assess your affordability and to get a current decision in principle for your mortgage. It is also sensible to engage with a solicitor from the outset, so they can guide you through the purchase process from the very beginning.
“The advice I give to any buyer at the outset is to stress the importance of taking your current needs and any anticipated future needs into consideration. For example, if you are looking to start a family in the near future, you may wish to think of factors such as the size of the property and its location.”
What are the benefits of buying a new build?
“Since everything in the property is new, you can experience modern living and peace of mind that you are the first owner of the property, therefore you don’t have to worry about any issues that may come up. Most builders offer an extensive snagging period which they will discuss with you, and you also benefit from a new home warranty for 10 years. Sometimes you might even be able to have input on the design of the home by choosing internal finishes, such as the kitchen and flooring.
“Newbuilds also have to comply with the latest building regulations, which means they are generally far more energy efficient in comparison to older properties that were built to previous standards. In the North East you may also receive incentives from the builder, such as covering LBTT costs or assistance with selling your current property.”
Key takeaway:
“Ultimately, if you see a property you like and you are in a position to purchase, don’t wait for the market to ‘improve’ or mortgage rates to come down further. It is not anticipated that mortgage interest rates will return to their previous, artificially low levels, and an improving market is one where more competition is likely to be faced.
“It is currently a buyers’ market and whilst I wouldn’t advise any buyer to make a quick decision on such a large and important commitment, there is currently more choice of properties available than in recent years, so an element of decisiveness is required.”
Gail Reid, Director at Gail Reid Mortgage Services
Why do you think people are tentative about buying property at the moment?
“I would say the increased interest rates and subsequent higher monthly payments on properties have definitely made home buyers more cautious this year. Coupled with the rising cost of living and a sense of ‘doom and gloom’ in the media regarding the property market, the result has been that many people have decided to wait and see if any economic improvement will occur before making their next move.”
Do you think mortgage rates will go down?
“I believe that mortgage interest rates will reduce and have come down from their peak already, however, they won’t fall to the low levels that we had become accustomed to previously.
“We’ve seen a gradual and steady decrease throughout 2023 which gives home buyers a positive start to 2024, and in a much better position to where we were a year ago.”
What advice would you give to someone who is looking to buy in the new year?
“It’s never too soon to start speaking to the professionals. Even if you’re in the very early stages of thinking about buying a property, it’s so important to get the facts and know your budget.
“Our team of advisers have years of mortgage experience and a vast amount of knowledge within the local property market, so we’re well equipped to support a range of home buyers and answer any questions they may have about the process.”
What are the benefits of buying a new build?
“There’s a lot of advantages to buying a new build home, but the biggest selling point in my opinion is how energy efficient they are. The level of efficiency you get from a brand new home is far superior to traditional properties that have been built to older regulations and standards. As a result, home buyers can benefit from significantly lower energy bills.”
Key takeaway:
“My number one takeaway for anyone considering buying a new home is to plan ahead. You should not only begin the process of reaching out to experts who can advise you early on, but also plan ahead in terms of what your needs might look like in a few years time and whether the property you purchase will fit with that lifestyle.”
Lorna Coutts, Chief Executive at Aberdeen Solicitors Property Centre
Why do you think people are tentative about buying property at the moment?
“We are still in a period of lower confidence - but it has improved from where we were a year ago. There has been time to adjust to high inflation and, in recent months, we’ve seen that the rate of inflation is slowing. Following month after month of Bank of England base rate increases, the rates have been held at 5.25% since the beginning of August which is reassuring.
“There is some uncertainty on the world stage with the Russia-Ukraine and Gaza-Israel conflicts. Add to that, a UK general election within the next 13 months and these are all factors that lead to non-essential house movers thinking that they might wait to see what develops.
“Despite this, property sales in the region are holding up reasonably well and we haven’t seen any drop off on aspc website traffic, with sessions and searches in line with previous years. I think this shows that alongside active house-hunters, those sitting on the fence are still following the market with interest.”
Is Aberdeen less impacted than other areas of the UK?
“Since the arrival of oil, the housing market in Aberdeen has often been at odds with the rest of the country, however, I don’t think we’re experiencing that currently – the energy sector is performing well so it’s likely wider economic factors taking precedence.
“We are seeing a slower market than the immediate post-Covid era. There is a slight reduction in properties coming to the market, but there is still plenty of choice for house-hunters, with a number of towns and villages in the local area where the market is very strong.
Will mortgage rates go down?
“Josh Kirkby recently wrote an article in The Times where he states that most analysts think that rates have peaked and will soon start to fall. He also provides a very well considered explanation that the current interest rates are at an unsustainable level, as the additional expenditure on mortgage repayments is adding a strain which may lead to negative economic growth.
“The Bank of England will of course want to avoid this, and so I’m hopeful that the downward trend we’ve seen in inflation will, in time, see interest rates start to fall. However, they won’t decrease to the record low rates we had prior to the Truss/Kwarteng Mini Budget.”
What advice would you give to someone who is looking to buy in the new year?
“Regardless of market conditions, the best place to start is to speak with a local solicitor, as they will have a high degree of knowledge within the local market. Checking your affordability is of equally high importance and I would recommend speaking to an independent financial advisor who is able to search the entire mortgage market.
“It’s important to think smart - what can you see changing in your life during the time you’re likely to own the property? Are there local amenities and services to facilitate those changing needs and will the home itself suit your lifestyle in years to come?”
Key takeaway:
“Buying a home is more than an investment – it’s a roof over your head. Yes, interest rates are higher than we’ve seen in recent years, but rental prices have seen steep increases which will likely drive more people to consider purchasing as home inflation and mortgage rates continue to stabilise.”