Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner. Facebook Messenger An icon of the facebook messenger app logo. Facebook An icon of a facebook f logo. Facebook Messenger An icon of the Twitter app logo. LinkedIn An icon of the LinkedIn logo. WhatsApp Messenger An icon of the Whatsapp messenger app logo. Email An icon of an mail envelope. Copy link A decentered black square over a white square.

Rising mortgage costs putting pressure on local property market

Property price drop: The value of property is going down monthly across Scotland. Photo by Shutterstock.
Property price drop: The value of property is going down monthly across Scotland. Photo by Shutterstock.

Local estate agents have warned that unless mortgage borrowing costs are reduced then the value of house prices will continue to fall as the north-east property market experiences a slowdown.

Reacting to recent figures which show that the average price for a property in Scotland has fallen for the second month in a row, Robert Davidson, a partner and property solicitor in the Aberdeen-based firm Peterkins, says that the economic turmoil sparked by former Chancellor Kwasi Kwarteng’s controversial mini-budget has had a direct impact on the local property market.

“New enquiries from clients looking to sell and purchase have dropped in recent weeks,” says Robert.

Increased mortgage rates has caused people to delay moving

“Combined with the cost of living crisis, the increase in mortgage rates has resulted in potential sellers and purchasers putting off their move for the moment.

“It’s too early to say by how much prices may fall further but unless borrowing costs are reduced then it’s likely we’ll see increased pressure on prices.”

Property slowdown: Property prices are going down month on month. Image: Shutterstock

He added: “It’s frustrating for the market locally because there was still a good level of demand for property prior to the mini-budget.

“Once mortgage rates and prices reach the right levels we would hope to see increased activity across the market again.”

Figures released by the chartered surveyors Walker Fraser Steele show that Aberdeen City was one of only three local authority areas in Scotland to see the average property price fall over the past year by –3.8%.

In demand: Properties in the Highlands are in demand. Image: Shutterstock

Property price fall

The value of detached homes in the region had the largest fall from £400,000 in September last year to £355,000 in September this year while between August and September this year the average price fell from £196,590 to £188,581.

The recent drop in prices would tie in with what we are seeing on the ground,” says Robert.

“The small monthly drops in August and September were probably a result of the market settling down after what had been an extremely busy period since the lifting of the initial Covid lockdown back in June 2020.”

Less demand for flats

According to Robert, demand and prices for flats in the city has dropped.

“During this time we’ve seen two distinct markets for houses and flats in Aberdeen and Aberdeenshire,” says Robert.

“An increase in demand and lack of supply of houses has seen prices increase while at the same time an over-supply and lack of demand for flats has seen prices for these drop.”

Between August and September this year, the average property price in Aberdeenshire fell from £234,337 to £232,143 while in Moray prices fell from £206,119 to £202,939 during the same period.

It was a similar picture in the Shetland Islands which saw property prices drop from £199,070 in August to £185,507 in September.

Highland slowdown

And although property prices didn’t decrease in the Highlands – from £229,108 in August to £229,665 in September – Mark Gollan, a Black Isle-based estate agent for Yopa says there has been a slowdown.

“The last 15 sales we have had sold for 6.40% over asking on average  – in the summer months we were 11% plus with a best of 26% over,” says Mark.

“This shows a slowdown in demand.

“Also currently, the average time to sell is 53 days – it was as low as 11 days in the summer.”

Property expert: Mark Gollan, an estate agent for Yopa based in the Highland says demand is outstripping supply. Image: Mark Gollan.

Demand for properties in the Highlands is also outstripping supply.

“Demand on rural properties is still high – anything that is a mortgage-based purchase is having the biggest slowdown,” says Mark.

Conversation