Plan to revolutionise mortgages

Readers of my blogs will know that I am always looking at innovative ways to increase activity in the housing market. One of the main issues in recent years has been a lack of mortgage finance.

I was very interested to hear about a new venture – Castle Trust – headed up by Sir Callum McCarthy, the former Chairman of the Financial Services Authority.  This venture has been launched in conjunction with the US private equity firm JC Flowers and is aimed at both house movers and first time buyers.  The Fund would give them a 20% deposit in return for a 40% share of any profits from an eventual sale.  Under the new plan Castle Trust would raise the money for the deposits by selling Bonds to Investors and their returns would be dictated by the Halifax House Price Survey. Investors could take out stakes from a minimum of £1,000.   The business model has yet to gain approval from the Financial Services Authority but it would not need a full Banking Licence. The Management Team of Castle Trust have extensive investment and mortgage industry experience and Sir Callum McCarthy advises that the Scheme is structured in such a way that JC Flowers will make money regardless of whether house prices go up or down.  I understand that JC Flowers have pumped £100m into the venture.

I think this is a truly innovative proposal and could help thousands of people who are struggling to get onto the housing ladder or those struggling to move into a larger house. 

I would advise that I have been in communication with Sir Calllum McCarthy and shall let you know as soon as I have further news to report. But in the meantime I welcome this initiative.

Lindsay Darroch
Head of Property Services

Dundee Property Market – Surge in Activity

Over the past week there has been a number of articles highlighting the weakness of the property market and how grim the prospects are for house prices in the UK. The most recent one had the headline ‘UK Housing Market Could Crash Harder Than US’ which appeared in the Wall Street Journal. I disagree with this view and see this as another example of a lack of understanding of the UK property market. There is a shortgage of housing in the UK and this in itself means you cannot compare the 2 markets.

Almost contradicting this view was the recent headline showing that mortgage product availability is at a 3 year high. Figures from Mortgage Brain show that over 2,000 new products were introduced during May representing a 2% increase in product availability. With increases in all 3 main product types there are now almost 4,500 more products available to UK mortgage intermediaries than 6 months ago. This represents a 60% uplift in overall product availability. Encouraging signs can also be seen for home buyers with a 20% deposit or less with the latest status showing that the number of products with the LTD rate of 80% or more has increased by 35% over the past 6 months.

Blackadders monitor the property market throughout Scotland and I can report that my Firm had a very good month for listings i.e. new houses coming on the market in May – May was also our best month for property sales in 2 years. As readers of my predictions for 2011 will know this surge is 2 months earlier than I expected. The Blackadders’ figures for May indicate to me the underlying strength of the Dundee property market in particular and the increasing confidence amongst purchasers throughout Scotland . If we could just get more assistance for first time buyers then I think that May will be the start of the property market coming to life.

I will continue to keep you advised of trends over the next few months.

ps Since dictating this blog I am pleased to report that June’s figures are continuing the positive trend – fingers crossed. In relation to first time buyers I have heard on the grapevine that the Scottish Government may shortly announce a plan – originally promoted by me a couple of years ago – involving the Government guaranteeing part of the mortgage. This scheme would be open to ftb’s and key workers and would allow lenders to increase loan to value percentage available.  A brilliant initiative that should be applauded if it comes off and one which will further help the Scottish property market.

Lindsay Darroch
Head of Property Services

Blackadders launch Home Move Box

Here at Blackadders, we are always keen to come up with innovative and different ways to assist our clients. At a recent Property Conference, I was introduced to the team behind the Home Move Box and Blackadders have now signed up and I understand that we are one of the first Solicitors in Scotland to sign up to this Scheme. The Home Move Box is completely free and contains everyday basic items to get home movers up and running such as tea, coffee, milk and various cleaning products. The box also includes discounts and offers selected specifically for home movers including special offers from Virgin Media and British Gas to name but a few. We launched this Scheme in June and have already had positive feedback from our clients. We will keep striving to give our clients something extra. The picture attached shows me with the Home Box!

Lindsay Darroch
Head of Property Services