Encouraging signs for property investors

Readers of previous blogs will know that I have been closely monitoring the increase in rental returns across Scotland,  in particular Dundee, and I would advise that this trend shows no sign of abating.

With the property market currently showing subdued activity levels due to mortgage pressures (and also the weather), there has never been a better time for someone interested in property to invest in the property market.

The caveat to this is that it is very important that you take advice from solicitors experienced in property investment.  I would be more than happy to have an initial no cost meeting with you to discuss the various options available to you.

Lindsay Darroch
Head of Property Services
T: 01382 229222
E: lindsay.darroch@blackadders.co.uk

Annual property tax proposal

A recent proposal from the Organisation for Economic Co-operation and Development is that the Government should look to raise more money from an annual property tax rather than trying to raise existing taxes on companies and individuals.  It also says that the property taxes could limit future housing market bubbles.

Probably not unexpectedly this proposal has been met with furious opposition from the property and mortgage industry.  Readers of previous blogs will know that I have always been very interested in a more refined form of Capital Gains Tax for properties – in particular targeting people who regularly trade properties that are not their sole or main residence.

I do not think that another annual tax on property, which sounds very much to me like a national form of Council Tax, would be beneficial or welcome by homeowners, especially in the current economic climate.  I would urge the Government to reconsider the concept of a Capital Gains Tax on properties that are sold within a 7 year period that are not sole or main residence with a graded form of Capital Gains Tax.  This would have the benefit of people paying it purely from gain rather than normal income and would also be a useful tool in controlling future housing bubbles.

Lindsay Darroch
Head of Property Services

Home Reports – The Final Nail in the Coffin?

Readers of previous blogs will know that in my opinion, the Home Reports imposed on the people of Scotland have been an unmitigated disaster – a stumbling block on the market, an unnecessary cost and impediment, and a solution to a problem that did not exist. 

Close Payment Services who provide the deferred funding option for Home Reports have decided to withdraw their product from all Home Report providers in Scotland. This means that from 1st January 2011 there will be no deferred payment option available for Home Reports.  This is a massive blow to the property market as a number of people currently take advantage of the deferred payment option to mitigate the upfront costs associated with putting a property on the market.  The withdrawal of this product could lead to a high number of properties not coming to the market and will further trap people who, especially in the current economic climate, require to sell their property but cannot afford to make the initial payment.

My firm is actively looking at other options for our clients and I would hope to be able to announce something shortly.

There has been a recent BBC investigation which has disclosed that the Home Report has actually increased the number of multiple surveys due to mortgage lenders not accepting the initial Home Report valuation and requiring a separate valuation.  This is a problem that I am sure will increase especially as properties stay on the market for longer than the 3 month lifespan of a Home Report thus requiring sellers to refresh their Home Report.

With the announcement today from Close Brothers and following on the recent BBC investigation, I would urge the Scottish Government to be bold and scrap the Home Report now and give the property market a fighting chance for 2011.

Lindsay Darroch
Head of Property Services