The Scottish Property Market!
The tide is going out in the Scottish property market, as everywhere else. The dramatic events in financial markets worldwide are inevitably affecting the confidence of both sellers and buyers and making money harder to come by. More properties are failing to sell at 'Offers over' prices on the initial campaign. Agents are reverting to higher 'Fixed prices' (equivalent to the English system of selling properties), which often turn into 'chippable prices'. Property supplements which were lightweight a few months ago are now turning into weighty tomes, as the stock of available property grows.
And yet, the picture painted above may be fair for much of the market, but is not true for the whole. Key sectors of the Scottish market remain remarkably strong. Large houses in Edinburgh, for example, worth several million, are riding the storm well. The city has a healthy crop of successful entrepreneurs and, somewhat controversially, the market is also sustained by the potential for development which a property with a large garden provides. Good properties in Edinburgh's Georgian New Town are also in high demand: clients have telephoned the day after the latest negative international finance story only to report in perplexed tones "I offered 25% above the asking price and there were three offers above me." Such instances reflect the fact that, whatever fears may be out there, Edinburgh remains small and prosperous. There is no evidence of a decline in its prime property prices, nor do we anticipate one. A lengthy 'plateau', however, looks distinctly possible.
In the country, whilst there are plenty of houses available for sale in the middle reaches it is, curiously perhaps, the top and bottom ends of the market which remain strong. Properties worth up to £300,000 are turning over briskly because they are 'affordable', whilst at the top end, classy houses and residential estates are thin on the ground and so holding their value very well. A good estate, with a fine house, woods and sporting remains a real rarity, generating fierce competition amongst many potential purchasers and thus a premium price.
Similarly, there are few good farms for sale. Agricultural prices have been rising steeply recently and farmers are looking to the future with more optimism as demand for their commodities increases worldwide due to increasing affluence and energy production from crops. The key buyers are farmers with funds from development, those from Northern Ireland where land is more expensive and, to a lesser extent, lifestyle buyers looking for a country house with land.
Mark Atkinson, Buccleuch Town & Country T: 0131 220 7920. Buccleuch and Jackson-Stops & Staff have a reciprocal arrangement, providing cross-border services to each other's clients.
Above: Dumfries & Galloway, excess £1.5 million
Below: Lothian & Borders, £695,000
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PRIVATE FINANCE |
Lenders search for quality
Having been lending to almost everyone at remarkably low rates, lenders now want only to increase profitability and security, not chase market share. Where last year it might have been possible to obtain a mortgage at 0.5% below base for a couple of years, now you might be asked to pay the same amount over base. Where last year you might have had to pay a flat fee which reflected genuine costs, application fees are now an integral, often percentage-based part of the lender's profit margin. Borrowers should watch out, too, for increased and less favourable early redemption terms. Overall, great care should be taken to review the whole market, not just the big players. Some of the smaller lenders are offering much better terms.
For those with first rate credit histories and plenty of equity (a high proportion of Jackson-Stops & Staff clients), the more positive news is that theirs is the very business that lenders seeking quality want. For them, mortgages are readily available, even if pricing and terms have changed considerably. Where prime applicants might have difficulties, however, is when the loan required exceeds £500,000. Here, mainstream lenders, more geared towards high volume, lower value loans, turn a little shy. Fortunately, specialists in larger loans do exist and, in most cases, offer preferable terms. In addition, lenders who fully understand a particular segment of the market are much more committed to it. Focused as we are on this sector, the value of such a commitment is something of which we are acutely aware. There have been reports recently of mortgage offers being "made one minute and withdrawn the next", to quote BBC News. This might be true, but it has never happened to a client of Jackson-Stops & Staff Private Finance.
Jackson-Stops & Staff Private Finance specialises in providing sound mortgage advice and can be contacted on 0870 600 1650. |
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