LACK OF PROPERTIES IMPACTS MARKET

As readers of my blogs know, I like to keep up to date with property statistics and the one that is causing me particular concern at the moment is the lack of properties coming on to the market.  I read a recent press release from the National Association of Estate Agents advising that the number of properties available to buy in each estate agent branch has worryingly plummeted to an eleven year low.  This is the lowest level of supply since January, 2004.

My concern is that stock can be driven down further by self-fulfilling prophecy – I don’t see anything I want to buy, therefore I am not putting my own property on the market.  A lack of stock has huge implications for prices and can mean that they reach unsustainable levels, which as well as creating a bubble, can also make it a lot harder for first time buyers to get on to the ladder.

Interesting times!

Lindsay Darroch
Partner & Head of Property 
www.blackadders.co.uk

ASSOCIATION OF SCOTTISH BUSINESS WOMEN ANNUAL AWARDS 2015

I wanted to congratulate the organisers of the above event, which once again was a very inspirational evening.  I would like to congratulate all nominees and winners and wish you all every success with your businesses in the future.

Lindsay Darroch
Partner & Head of Property
www.blackadders.co.uk

EU REGULATIONS FOR MORTGAGE MARKET

Readers of previous blogs will know that I have welcomed the upcoming review of the MMR rules, with a view to hopefully easing off punitive restrictions on mortgage lending.  I was interested to read a report that shows that 74% of brokers and 71% of lenders are concerned about the forthcoming European mortgage credit directive and the impact that it may have on lending activity in the UK for 2016.  I understand that many of the MCD changes are of a technical nature, but a lot of brokers are concerned that this will actually be more challenging than MMR.  Watch this space!

Lindsay Darroch
Partner – Head of Property
www.blackadders.co.uk

FOOD & DRINK REPORT

I was very interested to attend a recent business meeting organised by the Bank of Scotland where one of the topics covered was the Food & Drink Industry. They discussed the importance of this sector to the UK economy, and Scotland in particular.  I was very interested to hear about the contribution that Scotland’s Food & Drink Industry is making to the whole economy and that Scottish food exports in 2014 surpassed £1.1b and total food and & drink exports valued at £5.1billion.

I attach a link to the Bank of Scotland Food & Drink Report which I hope you find to be of interest.

Lindsay Darroch
Partner – Head of Property       
www.blackadders.co.uk

PROPERTY MARKET SNIPPET

I am waiting for the official figures regarding the number of properties that have come on to the Scottish property market in 2015 but the early indication (based on my own experience and via discussions with interested parties, including surveyors) is that the number of properties listed in 2015 is, at best, up 5% on the same period last year.  This figure is considerably lower than I had originally anticipated for this stage of the economic recovery but hopefully it is now moving in the right direction.  I will keep you advised as I receive further information.

Lindsay Darroch
Partner – Head of Property 
www.blackadders.co.uk

HOLYROOD UNVEILS HELP TO BUY SUCCESSORS SCHEME

Readers of previous blogs know I have been very critical of the Scottish Governments approach to the property market.  I was very pleased however to hear more details of its plans to spend £195m over the next three years on a successor to the existing Help to Buy (Scotland) Scheme.  The scheme will focus on affordable homes with eligible buyers receiving an equity loan towards the purchase price of a new build home.  The Scottish Government will work with the house building industry and lenders to agree on how the new scheme will operate. I believe this is a very positive move and should be welcomed.

I would urge the Scottish Government to go further and roll out the scheme to assist first time buyers purchasing non new build properties up to a certain value.  Not only would this fulfil the Scottish Government’s pledges in relation to improving Scotland’s housing stock by encouraging people to buy low end properties, it would also be a welcome boost to the housing market and would have huge social and economic benefits.  I will continue to press the Scottish Government to look at this type of scheme.

Lindsay Darroch
Partner – Head of Property
www.blackadders.co.uk  

BLACKADDERS SPONSOR CARNOUSTIE PANMURE FC

96 DPI (3)    logo

Blackadders are delighted to announce they will be the main website sponsor of Carnoustie Panmure FC for the 2015/16 season. The club play in the McBookie East Super league, the highest division in the region in Scottish Junior Football.

We are proud to be sponsors of ‘The Gowfers’ for the season, they have a superb history and a huge involvement in the local community. They have made a really bright start to the campaign and currently sit 2nd in the league.  We look forward to following their fortunes and wish the club the best of luck for the season ahead.

Lindsay Darroch
Partner – Head of Property 
www.blackadders.co.uk

INCREASE IN OVER 55s PURCHASING

I was very interested to read a report from Prudential advising that a third of home owners over the age of 55 are planning to buy at least one more property in their lives.  The majority are looking to downsize but nearly 1 in 5 are looking to purchase either buy to let property, second homes or homes for their relatives.

I believe that having a buy to let property in your portfolio as part of your pension retirement is a sensible diversification of resources and it is another reason why I am concerned with the Chancellor’s recent budget announcement regarding offsetting mortgage interest against income tax.  I am noticing an increase in the number of over 50s who are looking to buy one or two investment properties with small mortgages with a view to paying them off prior to retirement, creating an income and also a capital pot that they can access should they require.

I would urge the Chancellor to rethink his proposal.

Lindsay Darroch
Partner – Head of Property
www.blackadders.co.uk

EAST WEST DIVIDE

Dealing with transactions throughout Scotland allows me to see the different trends developing in all the geographical areas. Readers of my blog will be aware of my comments in relation to the varying speeds of economic recovery throughout Scotland.  At the moment the interesting market is Aberdeen, where the oil price is having a major impact on properties over £250k.  Properties valued below £250k have been unaffected and are still performing strongly.

I have also noticed recently a significant east-west divide in relation to asking prices. It is very common in the west coast of Scotland to set asking prices considerably below the Home Report valuation and client expectation to generate interest and increased prices.  This marketing tool can be used quite successfully and reinforces the importance of having expert legal advice when offering on properties. This trend gives me a wry smile given that the introduction of the Home Report was supposed to end the setting of low asking prices.

Lindsay Darroch
Partner – Head of Property
www.blackadders.co.uk

FURTHER ATTACK ON PRIVATE RENTAL SECTOR

Readers of my blogs will know of my disappointment to recent announcements by George Osborne in relation to the private rental sector and the ability to offset mortgage interest against rental income.

I was even more disappointed to hear in the Scottish Parliament’s version of the Queens Speech the plans for introducing local rent controls through a private tenancy bill.  This was in the face of the Scottish Government’s own consultation showing that 7 in 10 respondents were against controls.  Small to medium property investors are already spooked by the Chancellor’s recent budget announcement and the talk of rent controls will do nothing to allay these fears.  I fear that the knock on impact will be a drying up of the number of rental properties coming onto the market.

There are improvements that could be made to assist the quality of Scotland’s housing stock and still give protection to tenants but rent control is not one of them.  It was tried in the past and failed then and it will ultimately fail now.

I would much rather see a licensing system for all rental properties, a system to make it easier for the majority of owners of the block to appoint a factor to deal with common repairs and more focus on increasing the amount of properties being built.  From Zimbabwe land grabs to Soviet rent controls I am concerned that the Scottish Government is on the wrong track in relation to the Scottish property market.

Lindsay Darroch
Partner – Head of Property
www.blackadders.co.uk