Bank of Mum and Dad Closes – Hotel of Mum and Dad Stays Open

A recent survey carried out by Taylor Wimpey shows people are living with their parents more than a decade longer than they intended to as they wait to get on the property ladder. This problem has been exacerbated by the lack of mortgage funding for first time buyers. There has previously been an increase in requests for assistance from mum and dad but the survey also shows that 65% of parents advise that they simply don’t have the spare funds to help their children with a deposit for a house with nearly a quarter admitting that they themselves are struggling to keep afloat. This is a worrying trend and again shows the need for government to take action to assist first time buyers.

Lindsay Darroch
Partner & Head of Property


I am delighted to announce that I have just been advised by our mortgage brokers that they have today received access to 95% loan to value mortgages from a main high street lender. The usual caveats apply in that the product is subject to terms and conditions and also availability but I take this as very welcome news. I have long argued that mortgage availability is key to the housing market progressing and developing and hopefully this is the first of many similar products to hit the market in the next couple of weeks. This also re-enforces  the importance of clients receiving independent mortgage advice as part of the purchase process. For more information please don’t hesitate to contact either myself or any member of the Blackadders Property Team on one of the usual numbers. I will continue to keep you advised of developments.

Lindsay Darroch
Partner & Head of Property

Mortgage Products Stabilise in 2011

Recently published data from Mortgage Brain shows that the number of mortgage products available to intermediaries has risen marginally over the last 6 months increasing by 6%. Mark Lofthouse CEO of Mortgage Brain said “the past two years have seen vast improvements in product availability for intermediaries. But whilst it is clear that the market has made an impressive and much welcomed recovery since 2009 our latest half-year analysis is showing that the market is levelling out.”

As I have previously stated the availability of mortgage finance will go a long way to determining the Scottish property market in particular and the UK economy in general for 2012. This increase is welcome especially compared to the roller coaster in previous years however more sustained activity is required.

Lindsay Darroch
Partner & Head of Property

House Prices Higher than 12 Months Ago

The most recent report from the Glasgow Solicitors Property Centre indicates that house prices in the west of Scotland are approximately £4,000 higher than they were a year ago after a rally in the final months of 2011.  GSPC Chief Executive Mark Cordon advises “significant numbers of home owners are sacrificing a quick move to maximise their sale price.  Also the fall in the number of new instructions ultimately restricts supply and so helps to support prices.”

I find this report interesting as it reinforces the current east/west divide in the Scottish property market.  On the east coast property prices remain stable with the number of properties coming on the market also remaining relatively  stable .  I also do think that there is a fallacy in relation to house prices as most sellers are not in a position to drop their prices below a certain amount most often determined by the level of their outstanding mortgage and the requirement of a deposit for a future purchase. 

I will continue to report on trends and reports.

Lindsay Darroch
Partner & Head of Property

A Gradual Recovery Predicted for UK Property Market – 2012

The National Association of Estate Agents has revealed its predictions for the UK property market for 2012.  They predict a gradual recovery for the UK property market with lack of available finance being the biggest barrier to would be home buyers.  This ties in very much with my view and I was also pleased to see that the NAEA are indicating that house prices on average will see little change.   Peter Bolton King, Chief Executive, said “confidence in 2012 will be a key factor and this, to some extent, will be driven by the media”.  I believe that certainty and confidence will be the two watch words for 2012 and if we can get some positive messages out into the media this will have an impact on the UK housing market.

Lindsay Darroch
Partner and Head of Property

IPPR report – extend right to buy

I was  interested to note the launch of a report by the IPPR Think Tank which calls for more Housing Association tenants to be given the right to buy their homes.  The report was championed by two MP’s David Davis and Frank Field.  The IPPR’s report said extending right to buy could generate billions of pounds which could then be reinvested in building new homes to ease waiting lists. 

Readers of previous blogs will know that I have been urging the government to take this step as part of a plan to unlock the housing market.  I am of the view that if Council tenants and Housing Association tenants are given the right to purchase their property at a discount, this will not only lead to an increase in home ownership but if all funds raised were used to build new homes this would go some way to alleviating the issue of homelessness whilst also providing a welcome boost to the ailing construction industry.  Mark Henderson Chief Executive of The Home Group Housing Association said that extending the right to buy could inject more than 68 billion pounds into the economy. 

I note that Grant Shapps, the Housing Minister, has advised that the government would consider this idea as part of its review of housing policy and I would call on both the UK and Scottish Government to give this proposal serious consideration and act on it as a matter of urgency.

Lindsay Darroch
Partner and Head of Property

Property Market Predictions for 2012

Firstly how did I get on with my predictions for 2011? The first six months went as predicted with Quarter 1 being depressed and Quarter 2 showing an upturn in activity levels. The sovereign debt crisis, which continues, led to an increase in uncertainty and trepidation and while Quarter 3 was a strong quarter for property sales there was a noticeable slowdown for listings. Quarter 4 did not end on the upbeat note that I anticipated. Prices remained level for 2011 – the most recent Nationwide report actually shows a small increase (!!) – this is in line with my predictions. I score myself 7 out of 10.

On to 2012 – My feeling is that with the sovereign debt crisis rumbling on, further public sector cuts and Banks continuing to tighten up on lending criteria, Quarter 1 and Quarter 2 of 2012 will be very subdued. I anticipate Quarter 1 activity levels coming close to the low point of 2009. I  hope that there will be renewed vigour and energy in terms of dealing with the sovereign debt crisis with a corner being turned sometime in Quarter 2. I am also anticipating that the faltering recovery in America will start gaining more traction during Quarter 2 of 2012 (with the feel-good factor of the Presidential Election in November impacting on the year-end). By Quarter 3 we will start seeing a steady increase in property market activity levels with Quarter 4 ending on a high point. Overall I predict activity levels finishing at the same levels of 2011 but with a much slower start. As with 2011 my feeling is that property prices will remain stable.

Issues to look out for – the sovereign debt crisis, the state of the American economy and the wariness of banks with regards to mortgage lending. I do believe that 2012 will be the turning point not only for the Scottish housing market but also the UK economy in general. While the East/West divide will continue for the Scottish housing market I think that it will show its resilience and when activity levels do turn for the better there will be a sharp and prolonged increase. This increase in activity will start in quarter 3.

Wish list for 2012 – many of these items were also on the 2011 wish list but I make no apologies for repeating them.

My wishes for 2012: –

  1. More assistance for first time buyers – government guarantee funded by the compulsory introduction of mortgage indemnity premiums. It is imperative for the health of the Scottish housing market that we get the number of first time buyers back up to that magical 40% level.
  2. Tax breaks for property investment – rents continue to surge and homelessness is a blight upon society. The government needs to take steps to deal with both these issues. By encouraging people to invest funds in property this will stabilise the property market in terms of activity levels increasing the confidence of Banks to lend more. 
  3. Increase in funding provision for housing associations for the provision of social housing. Not only would this assist the construction industry but would also be another means of tackling homelessness.
  4. Home Reports being abolished or at least temporarily suspended. Alternatively remove the valuation element of Home Reports and leave them simply as a report on the condition of a property. Perhaps even removing the need for Home Reports to be compulsory would be a useful exercise in ascertaining how helpful they are to the property market.

I will continue to campaign on behalf of the Scottish property market as I am of the view that a stable and strong housing market is essential to the general economy. I take this opportunity to wish all the readers of this blog a happy and prosperous new year and look forward to communicating with you further during the course of 2012