Penicuik Property Values 3.3% higher than year ago

Penicuik property values rose by 1.4% last quarter, meaning they are 3.3% higher than 12 months ago. Overall, I expect future property price growth to remain firm, built on the foundations of an improving labour market, strengthening economy and very low mortgage rates. In fact, talking to a number of other agents in the town, mortgage arrangers and solicitors (all of whom have their direct finger on the pulse of the Penicuik property market), the steady long term growth in Penicuik property prices tied in by strong demand conditions so far this summer, alongside an underlying lack of supply and the continued low mortgage rate environment, means the slow but steady upward momentum of the Penicuik property market is likely to continue in the second half of 2015.

However, there are a couple points I wish to highlight as all my blog readers will know, I like to give a balanced and honest opinion of what is happening in the Penicuik property market.  The two main points being low interest rates and a lack of supply of property.

Interest rates first – Mark Carney (Chief of the Bank of England) said in a speech a few weeks ago at Lincoln Cathedral, the Bank will be seriously considering raising interest rates around Christmas time. An upward movement in interest rates will temper demand and result in a marked slowdown in house price growth. Mr Carney said that only six out of ten people that had a mortgage (57% to exact) had a variable rate mortgage, compared with more than seven out of ten people (73% to be exact) in the Summer of 2012. Now I am not a mortgage arranger and cannot give advice, but rates are only going in one direction, so whether you are a landlord or homeowner, this might be a time to consider fixing your mortgage rate?  Don’t say I didn’t warn you!

Tie this in with the stricter mortgage lending rules which were introduced in 2014, which affected people’s ability to have larger mortgages, this means homeowners will need to be realistic in their pricing if they want to sell. Reading other recent reports though, property owners have continued to pay off mortgages at a faster rate while mortgage rates have been low. Therefore, when mortgage rates rise, this would affect home movers sentiment which would result in a marked slowdown in the rate of house price growth.

Shortage of Supply – As I have mentioned in previous articles, the number of properties on the market in Penicuik is comparatively low at the moment. One reason is the large number of buy to let landlords who have bought Penicuik property over the past fifteen years. Unlike first time buyers who tend to move on after a few years, landlords tend to keep their properties long term, meaning there are fewer properties coming onto the market ... thus restricting supply and sales.

If you are planning on investing in the Penicuik property market, or just want to know more, things to consider for a successful buy to let investment, please feel free to contact me on 01968 674601 or pop in and see me at our office at 6 Bank Street.