Whether you’re considering stepping onto the property ladder for the first time, or contemplating selling your home, it's important to equip yourself with as much information as possible - and what better way to do so than by getting advice from the professionals.
In this article, we’ve interviewed three property experts from across Aberdeen city and shire to share insights into the current climate of the property market in the North East, and collate helpful tips and advice for future buyers and sellers.
Chris Comfort, Partner at Aberdein Considine
Why do you think people are tentative about buying property at the moment?
“I think for a lot of buyers, the artificially low interest rates that were around for a significant period of time is something that people have become accustomed to. In addition, the media has also played a role in sensationalising the rise in interest rates too.”
Why may Aberdeen be less impacted than other areas of the UK?
“Aberdeen may be less impacted than other areas of the country because Aberdeen operates in a bit of a bubble and tends to react differently than other cities across the UK. This has been proven time and time again with oil downturns, recessions and financial crashes. For example, during the oil and gas downturn, the micro economy that came from it really protected Aberdeen over the period of 2009 to 2012.
“Another thing that protects Aberdeen is the differing inflation rates from other Scottish cities such as Edinburgh, Glasgow and potentially Inverness. When you have such significant price inflation over a comparably short period of time, the market is by default less stable or more inclined to fluctuate, whereas in Aberdeen, the market has been more stable in terms of price point and more affordable as a result. This means there is less likelihood you’ll have a significant downturn in property values.”
Will mortgage rates go down?
“Personally, I think there could be fluctuation over the course of the next year with small dips throughout. Based on Jeremy Hunt’s recent budget, I would say there will be a gradual rise, but not the same high rise that was predicted or foretold by the media in recent months.”
What advice would you give to someone who is looking to buy?
“I would recommend carefully thinking about your need to buy, what you want to buy and what would be the advantages of buying now versus holding off. The advantage of buying now would be that there’s less competition in the market, giving you more chance of obtaining a better deal on a property.
“One of the other main pieces of advice would be to seek detailed advice on any budgets to ensure you have thoroughly assessed your affordability.”
What benefits are there to buying a new build?
“Energy efficiency, peace of mind with a 10-year guarantee and the ability to move with minimum inconvenience. New build homes tend to come with incentives such as helping to sell your current home, contributing to your deposit or land tax and long-term assistance. When you buy a new build home, you also have the security of knowing that everything in your house is brand new.
“When you compare older properties to new builds, you need to take into account the additional costs that may be associated with an older home. For example, will you have to upgrade the boiler? Do the kitchen and bathroom need to be renovated? These tasks will be extras on top of the existing price you paid for the property.”
Key takeaway:
“If buying a home is something you’re looking to explore for the first time, then now is the perfect time to gain advice. I think over the course of the next 3 months, there will be a settling down period. There are opportunities within the market to get ahead, by committing to doing something where you can get a better deal, rather than waiting until the rest of the market catches up.”
Gail Reid, Director at Gail Reid Mortgage Services
Why do you think people are tentative about buying property at the moment?
“We’ve had an increase in people coming to us wanting to know if now is the right time to buy.
"The negative way information is presented on the news coupled with the fact that utility bills are increasing has caused people to panic and has had a huge impact on people deciding whether to purchase a property.
"Now more than ever we’re pushing the importance of mortgage advice. It's always worth getting an expert opinion before making a decision.”
Is now a good time to buy?
"I don’t think it's a bad time to buy but budgeting is so important. A mortgage broker will help you to understand not only what you can achieve as a maximum mortgage from a lender but more importantly what you can afford monthly and how that translates to maximum purchase price."
With mortgages going up for landlords too, what does this mean for people who are renting?
"It’s an unsettling time if you are a private tenant as you don’t know how your landlord is going to react to mortgage rate increases and many will find themselves potentially with increased monthly rents as a result."
What advice would you give to someone who is looking to buy?
“You need to get advice as early on in the process as you possibly can - this is no different to the message we were pushing beforehand."
Key takeaway:
“Regardless of what the interest rate is, if you need a new house then you need a new house! Get advice and know your budget.’’
Lorna Coutts, Chief Executive at Aberdeen Solicitors Property Centre
Why do you think people are tentative about buying property at the moment?
“It’s not surprising that people are a little tentative at the moment. There is a lot going on - energy prices are very high, inflation has risen, and the general economic background is not as good as it once was. Possibly the most direct influence on the property market is the rise in interest rates.
“When you look at historical data from the past 50 years, you come to realise that the interest rates that we see now are relatively normal. Prior to 2008, the lowest base rates were 4.5% and the base rate is now at 3%, so we are not even at the level we saw before the banking crash.
“There are very few people who buy a property and look at selling it a year or two later. For most people, the purchase of a property is the purchase of their home - a roof over their heads, a place to bring up children, and at the moment there are some good deals to be had.”
How is the current market in the North East? Have you noticed any significant change or has it remained strong?
“It's important to acknowledge that the Aberdeen market is unique compared to the rest of the UK, which means what is going on nationally in the property market doesn’t always apply to our local market. The Aberdeen market is strongly linked to the oil price.
“One of our recent reports from Aberdeen University in Q3 of 2022 indicated that for the first time in recent years, all indicators were positive. The market is definitely going in the right direction as stock is continuing to decrease, which shows that there are certainly buyers out there.
“In the years 2017, 2018 and 2019, we had an average of 22,000 active myASPC account holders, and when compared to the exact same date in 2022, the statistics showed 28,000. This shows higher activity levels than during our last ‘normal’ market period, prior to COVID-19.
What advice would you give to someone who is looking to buy?
“It's important to speak to a local solicitor, as they will have a high degree of knowledge within the local market, unlike solicitors from further afield who may have more generalised knowledge.
“We’ve also been advising people to check their affordability and encouraging them to seek independent financial advice as early as possible.
“Also, it’s worthwhile when viewing a property, asking the current owners questions such as how much they pay for energy usage as this will help you gauge how much the property costs to run.”
Key takeaway:
“Take the long-term view, there may be ups and downs, but it will balance out in the end. May look at property as an investment, but in reality it’s a necessity.”
If you are considering buying a home, the Kirkwood team is here to help…
