East central Scotland housing market continues to strengthen 10 years after financial crash

House prices across the UK were affected significantly by the financial crisis.

According to historic ESPC data, the average selling price in Edinburgh between May and July 2008 was £241,114, which was a 5.3 per cent increase on the same period the previous year.

This fell to just £193,354 between October and December 2008, a 19.8 per cent decrease on the May to July figure, and a 10.1 per cent decrease compared to the same period during the previous year. There were also significant year-on-year price decreases seen in the first six months of 2009 in Edinburgh, the Lothians and Fife.

However, ten years on, the east central Scotland housing market continues to strengthen.

ESPC’s August 2018 House Price Report revealed that average selling prices are increasing steadily, with prices across east central Scotland between June and August 2018 rising to £248,092, which is a 3.4 per cent increase compared to the same period last year. In Edinburgh, the average selling price increased by 4.5 per cent during this period compared to last year. Furthermore, a 5 per cent annual increase in the number of properties coming to market is a positive sign for buyers in east central Scotland as a shortage of properties has been limiting the market in recent years.

The world of mortgages and borrowing has also changed significantly since the years before the financial crash. Lending has become stricter, and, in most cases, a 5 per cent deposit is the minimum required to obtain a mortgage, subject to satisfying other lending criteria requirements. This differs to the years before the crash, when 100 per cent mortgages were more commonplace. Mortgage rates are also very low compared to the higher rates in the years before the crash, making monthly repayments much more manageable.

David Lauder, financial planning consultant with ESPC Mortgages, said: “Lending has become stricter since the credit crash and is now based more on affordability than the amount of income and set multiples of this income amount. People on the same income may therefore be offered different borrowing amounts, if they have different levels of debt or fixed commitments in the background.

“Also, the minimum deposit requirement is now 5 per cent and even then, the credit score needed to obtain a mortgage can be at a higher level. In short, lessons have been learned and lending appears to have taken on a more common-sense approach. However, there are still a significant number of people who are eligible for mortgages and who could be potentially helped by ESPC Mortgages. If you have good financial habits, a 5 per cent deposit and a good income then you have a strong chance of being accepted for a mortgage.”