Demand for properties remains high, despite interest rates rising. The amended LIFT scheme from the Scottish government will help first time buyers and priority groups.

It’s been an eventful 6 – 8 weeks at CastleBrae as we continue to value and sell properties as well as welcome new landlords and tenants. Our long-serving colleague, Alexis, has decided to spend more time with her young family and we wish her the very best.

From a property market perspective, we anticipated the market may slow down after the fast paced two and a half years during Covid-19. This has not been the case and properties continue to frequently sell over the home report value. 

The rental market - as has been reported in the news - remains buoyant with tenants often waiting for properties to become available. We’ve had rental properties where there’s been over 20 applicants suitable, so we’re striving to partner with more landlords to fulfil the demand.

Interest rates

The news has been regularly reporting about the rising interest rates. The Bank of England set interest rates in January 2022 at 0.25% and since then they’ve risen to 1.75%. Whilst this is a significant jump in a short period of time, the expectation is that inflation will fall and the costs of goods and services will be better controlled.

We’ve been speaking to mortgage advisers about the rising interest rates and they’ve confirmed they haven’t seen a decline in their mortgage applications. They even confirmed they’ve had greater interest from first time buyers. This is potentially because first time buyers have missed out on properties when they’ve gone to a closing date.

We expect the property market to continue to thrive in the coming years as the demand to move home and “up the property ladder” remains strong.

Many people will remember when interest rates rose to over 7% in 1997 (or even higher in the 1970s) and despite mortgage repayments rising, it’s unlikely to deter families who need more space or people keen to downsize as they near retirement.

LIFT scheme

The Scottish government initiative, LIFT or Open Market Shared Equity (OMSE) scheme, has enabled over 13,000 first time buyers and people within priority groups to own their own home. It’s a shared equity scheme and potential homeowners can obtain a mortgage for a minimum of 60% of the property value, with the remaining funds coming from the Scottish government. When the property is sold, the equity percentage would be returned to the government.

There were two essential changes to the scheme in August, the first is that the threshold amounts (how much you could offer up to in each area) were updated and became far more competitive. The second change was that homebuyers were allowed to offer over the home report value on a property, as long as it remained under the threshold criteria. For example, if a two bedroom property in West Lothian was valued at £60,000 in the home report, you could offer over £70,000 if you had the extra £10,000. This was not originally permitted and allows more flexibility under the LIFT / OMSE scheme. 

Can we help?

If you’re thinking about selling your home or you’re a landlord and need assistance to market or manage your rental property, please get in touch. We would be delighted to provide a free property and market appraisal, outline how we can support you and answer any of your questions.

Call today on 01506 676 300 to find out more.