I was delighted to once again be on the panel of judges and present at the Women Ahead Awards. The annual prize giving which took place on Saturday 15th of March at the Apex hotel was a great success and thanks must be passed on to the brilliant team who pulled it all together. There were a number of worthy winners and it was very inspiring to meet all the finalists and learn about their fantastic businesses achievements. The photograph shows me presenting the Blackadders Most Enterprising Business of the Year Award to Caroline Millar of The Hideaway Experience.Lindsay Darroch Partner & Head of Property
Following on from my recent blog regarding Scottish Government proposals to change SDLT in 2015, I have been interested to hear, as the March budget approaches, the increasing calls on the Chancellor to amend Stamp Duty. As well as RICS we have also recently had the National Association of Estate Agents issuing a statement, calling on the Chancellor to make the supply of homes and mobility in the property market a major theme for this year’s budget. This chimes very much with my own feelings in relation to the social and economic benefits that are derived from assisting people to get on the property market. Whilst I have some concerns regarding the proposed changes from the Scottish Government to SDLT, I do agree that the slab structure of Stamp Duty requires to be amended to make it a more progressive tax. I also feel that the levels at which the Stamp Duty rate kicks in, and thereafter changes, should also be amended to reflect the increased prices in the property market and also assist the mobility of people to get onto the housing ladder.
With this point in mind I was very pleased to hear an innovative approach from the Halifax who are offering to pay Stamp Duty for a first time buyer as part of one of their first time buyer products.Lindsay Darroch Partner & Head of Property
Readers of my blogs will know that I am planning to report on my predictions for the 2014 property market once we are passed the end of March. However, I thought it would be interesting to gather some info up to the end of February and give you a brief update. I caveat my comments by saying that these are not based on any official figures but simply from the Blackadders’ Property team stats, pieces of information that I have picked up over the last week or so and also my own feelings about how the property market is performing.
As stated in a number of my market overview blogs, there is still very much an east/west divide in the Scottish property market – the west coast, in particular Glasgow, is very much lagging behind the rest of the country. On the other hand there are signs of improvement in the east coast and Aberdeen is still performing exceptionally well.
My feeling is that transactional levels, i.e. sales and purchases will be up by about 20% and with the number of properties coming on to the market showing a much smaller increase – probably 10%. This ratio can only carry on for so long without there being a serious increase in property price inflation and thereafter stagnation. I am already noticing signs of price inflation in the number of closing dates that I have been offering in the last couple of months, the outcomes of which I monitor very closely. The Blackadders’ Estate Agency team are also coming across the words “we are not prepared to put our house on the market until we see something that we want to buy” – this is potentially the beginning of stagnation (in relation to price inflation it will be interesting to see how the Home Report copes – or doesn’t (!) and I will have a further blog on this shortly).
I am noticing developers gearing up sites and applying for planning permission for large scale developments but these will not come on line, if at all, until 2015.
On a positive note I am noticing an increase in the number of property investors coming in to the market, in particular in Dundee, attracted by its comparatively low entry prices, good rental yields and potential for capital growth on the back of the redevelopment of the city.
Let us hope that the Ides of March do not bode an inflation/stagnation cycle for the property market. I will report again soon.Lindsay Darroch Partner & Head of Property
I was interested to read comments from one of Taylor Wimpey’s Senior Executives calling for Government to wean the housing market off Help to Buy. The firm’s Group Land and Planning Director, Peter Andrew, said “Help to Buy had led to a measurable improvement in the company’s order book and had led to a UK wide improvement in confidence in housing” however he felt that the housing market would need to be weaned off Help to Buy in a sensible way with lenders picking up the momentum instead.
Whilst I agree with his overall strategy – in that I would like to see lenders taking up the baton of funding the housing market - I think it is too early at this stage for any restriction in the Help to Buy Scheme. As I have previously indicated the property market statistic that I am most interested in for 2014 is the number of properties coming into the market for sale.
On another note it was good to see that Taylor Wimpey have started 2014 with a £1.2billion pound pipeline of new orders which is a very positive way to start the year.Lindsay Darroch Partner & Head of Property
I refer to my previous blog in June 2013 about the Land and Building Transactions Tax (Scotland) Bill. As I previously indicated this will be a progressive tax however the actual rates of LBTT are not yet known and I think it will be unlikely that they will be revealed prior to the Referendum in September. I was at a seminar held by Savills where the LBTT was discussed and, if the rates and approach are as they are set out in the consultation document, then LBTT would favour residential sales at £180,000 or less however sales above £200,000 would incur a higher rate of tax than at present. Whilst I do not disagree with the progressive approach to the tax, I am concerned that it will have a negative impact on the residential housing market in Scotland by making it considerably more expensive for people who are moving in the £180,000 to 1.5million price bands. This could lead to a further brake on the property market when Government should be doing all it can to encourage activity. I would say that the above rates apply to residential properties and there are different rates applicable to commercial properties.
I will report as soon as I have more information.Lindsay Darroch Partner & Head of Property
As readers of my blog will know, I am a passionate advocate for the city of Dundee and I am excited by the regeneration of the city and the waterfront development which includes Malmaison, the V&A and the redevelopment of the railway station. Dundee provides easy access to Edinburgh, Aberdeen and Glasgow and should position itself as the regional hub for Scotland. For the regional hub concept to work and for Dundee to take full advantage of the extra visitors which could be generated on the back of the waterfront development, it is vital that the city continues to operate an airport. I have been following the recent discussions regarding Dundee airport and I would urge Scottish and local government to redevelop Leuchars airbase and make it an international airport. This to me would be an obvious next piece of the jigsaw and would have a huge impact on the local economy and the local housing market. Let’s start the campaign now.Lindsay Darroch Partner & Head of Property
As readers of previous blogs know, the figure that I continue to monitor is the number of first time buyers coming onto the market. I was interested to see new CML data, released yesterday on the profile of UK lending in December 2013 which shows the number of first time buyers increasing by 37%. CML data also indicates that for the whole of 2013 lending to first time buyers was up by over 23% compared to 2012. As previously indicated, first time buyers are an important factor in stabilising and driving forward the property market and I have always stated that the number of first time buyer purchasers in a normal flowing market should be in excess of 40%. According to the CML figures 45% of all purchasers in December were first time buyers. During the course of 2014 I believe we will see a conflict between the need to continue the support for first time buyers to improve economic conditions and talk of a possible property price bubble. It was a positive end to 2013 and I will keep you up to date with 2014 trends.Lindsay Darroch Partner - Head of Property
I was very interested to read Mark Hordern’s blog about a normal property market. Mark is Chief Executive of GSPC and he has his finger on the pulse of the market especially on the west coast. Mark’s conclusion was that we are still some way off a normal market and I have to agree with his assessment. Transactional levels would need to increase significantly – probably by about another 50% per annum for us to reach a normal free-flowing market. It is only with an increase in transactional levels that we will be able to control a spike in housing prices because as levels remain low, distortions in the market will appear and supply and demand will be out of sync causing unsustainable rises in prices.Lindsay Darroch Partner – Head of Property
The Registers of Scotland have reported that the number of residential properties sold in Scotland in the third quarter of the financial year rose by more than a quarter on the same period in 2012. The total volumes for the period were 25,579 properties which was the highest recorded for this quarter since quarter 3 of 2007/8 – the peak of the property market. As I have previously indicated my concern is not regarding the number of sales but the number of properties coming onto the market which will be the most telling statistic over the next couple of months and will ultimately drive or curtail the property market. More information to follow.Lindsay Darroch Partner – Head of Property
I was interested to read a report from RICS advising that a shortage of homes coming on to the nation’s housing market is seriously hampering growth and pushing prices higher in many parts of the country. Readers of my blog will know this coincides with my views and concerns about the property market for 2014. The RICS January Residential Market Survey advised that the number of houses coming up for sale across the UK hit its lowest point since July 2012 despite the amount of potential buyers being considerably higher. The RICS is reporting, however, that its members are expecting more sellers to come on to the market as the weather improves and we hit the traditional Spring rush. Peter Bolton King, the RICS Global Residential Director, has advised that:
“It is no secret that we are seeing prices go up in many parts of the country driven largely by the lack of properties coming on to the market. With more people now in a position to buy a home than at any point over the past few years there are simply not enough properties to satisfy demand.”
This report very much coincides with my own view and I would reiterate the need for local and national Government to support developers and also to move all barriers and costs to encourage more properties to come on to the market.Lindsay Darroch Partner – Head of Property