I was delighted to carry on my firm’s long involvement with the Whitehall Theatre. As a very proud Dundonian I am excited and very positive about the redevelopment of the city and in particular the waterfront. With all this massive investment it is also good to see a local icon, as the Whitehall Theatre is to most Dundonians, go from strength to strength.
Our initial sponsorship will be used to purchase a curtain which will be used to amend the size of the auditorium increasing the number and types of production that the Whitehall Theatre is able to host. The undernoted photo, which is courtesy of the Evening Telegraph, Dundee and taken by photographer Bob Douglas shows me presenting the cheque to the Trustees of the Whitehall Theatre.
Partner – Head of Property
As promised, I thought that I would give you my further thoughts in relation to the Additional Dwelling Supplement. As readers of my blogs know, I am against this supplement as I feel 1) it will cause a manipulation of the market, 2) there will be unintended consequences and 3) it will put a brake on property investors buying certain properties which will have a blocking effect on the housing market, rather than the freeing up that was intended. I will answer these points in order:-
- Manipulation of the Market – I can confirm from personal experience, and also from speaking to other property lawyers, that there was a massive increase in the number of property investors purchasing investment properties in February and March of this year, prior to the introduction of the surcharge. In my own local area of Dundee and Angus there was a 45% increase in the number of flats sold in March. I have also been acting for a number of clients across Scotland and had to deal with rapidly increasing prices and competitive situations.
- Unintended Consequences – Clients may want to assist a child in buying a property and the only option may be to incorporate themselves onto the Title – this will now carry an extra 3% charge. Similarly, a separating couple where the person leaving the matrimonial home needs to buy another property will now incur the 3% charge. The unfairness of the system seems very clear to me.
- Blocking of the Housing Market – The surcharge was intended to price property investors out of the market to make it easier for first time buyers but in my experience, investors are generally not purchasing the types of properties that would be of interest to first time buyers. All that’s happened is there’s now a swathe of sellers who no longer have the property investors looking at their property or if they do, the investor has factored in the 3% charge. This is perhaps not true in all cases as there will be some instances where it will be easier for first time buyers to step on the ladder because they are not competing with property investors, but I would suggest that this will be by far the minority of cases. A drying up of the supply of rented properties will increase rents meaning it will be harder for people to save the requisite deposit to allow them on the property ladder. I would hope that the Government would use some of the 3% surcharge to fund a scheme to assist first time buyers gain access to 95% loan to value mortgages, thus minimising their deposit to 5%.
I was also very interested to read an article by Phillip Aldrick in The Times on Saturday 23rd April. The article was based on the introduction of a Land Bank Tax – a stick to encourage developers to begin developing properties to feed into the market. This would have the benefit of alleviating the shortage of houses throughout the UK and would also help control prices, which continue to soar due to lack of supply. I would agree with this policy. He concluded:-
“Taxes are not just about revenues, they can be used to change behaviour. Get a Land Bank policy right and it might not raise a penny but it could turn Britain’s dream of more houses into reality”.
In conclusion, I would urge the Government to rethink the Additional Dwelling Surcharge, introduce a Land Bank Tax and also change the Capital Gains Tax policies in relation to properties, using the extra funds raised to create a first time buyer fund.
Partner – Head of Property
It has been a very interesting start to the year for the property market. After a very sluggish start in January, the number of new properties coming on to the market across Scotland picked up, with March being one of the best months ever. Although numbers were still considerably below peak market levels of 2007, Quarter 1 of 2016 was certainly moving in the right direction.
The extra properties coming on to the market were also reflective in the increase in purchases, which was driven to extreme levels in March with the introduction of the additional dwelling supplement coming in on the 1st April. This caused property investors to make purchases early to avoid the 3% surcharge (more on this in another blog). As an aside, I am still not noticing any cooling off with property investor activity although it is perhaps too early to say at this stage what the rest of the year will be like.
Developers continue to play their part with new sites coming on line and incentives, such as part exchange, being used where necessary. My feeling is that Quarter 2 will follow a similar pattern with April being slightly quieter but with a pick-up in May and June, with hopefully higher levels than 2015.
The main exception for the Scottish market is in relation to Aberdeen, which is going through a correction and I think 2016 will be a tough time for that market – again a blog to follow.
Partner – Head of Property