Independence debate having no effect on improving Scottish property market

Taylor Scott International News

Scottish house prices have so far shown no negative response to the independence debate with prices up 1.1% in January, the largest monthly increase for over four years. Average prices are also up 3.9% year on year, the largest annual increase since September 2010, according to data from the latest LSL/Acadata Scotland House Price Index. It takes the average house price to £160,270. ‘The enthusiasm of property investors suggests the independence debate is having no impact on confidence within the Scottish housing market. Scottish prices were up £1,680 in January,’ said Donald MacLellan, chairman of Walker Fraser Steele Chartered Surveyors, part of LSL Property Services. He pointed out that five consecutive months of rising prices indicate the market has bounced back fast as it gathers the fruits of the wider economic recovery. ‘Whether the possibility of Scottish independence throws up all sorts of question marks such as the economic cost of a separate monetary system for Scotland, currency risks, changes to stamp duty and land tax, the property market seems currently unaffected,’ he explained. ‘And whether some businesses are alarmed by the prospect of the use of a currency other than sterling, a development that might lead to a rise in transitional risks, large business costs, with corresponding implications for jobs, as of yet there is little obvious impact,’ he said. ‘Banks such as RBS and Standard Life have threatened to leave Scotland altogether and decamp to England, possibly causing a drop in net lending. But if a yes vote for independence looked like the more probable outcome, we would expect this uncertainty to have manifested itself in property prices. As we can see, there has been no such impact on the housing market,’ he added. The LDL data also shows that 2014 recorded the highest volume of sales in a January since 2008. ‘Increased lending and mortgage availability are reaching heights not seen since before the recession as first time buyers return to the market en masse. Mortgage finance, for those who can access it, is at its cheapest for some time,’ said MacLellan. ‘This is sustaining activity in all sections of the market, specifically buy to let investors and homeowners looking to upgrade. The spring market in Scotland will see more lending to first time buyers thanks to cheaper rates, a boost in high loan to value mortgages and the support of Help to Buy,’ he added. He also pointed out that the lack of supply in properties in Scotland is boosting competition between new and previous buyers, propping up prices, adding that the property market doesn’t appear to think things are set to change any time soon. Interest in Scottish rural estates remains relatively healthy despite the independence referendum and the possibility of new land reform legislation, it is claimed. When it comes to the more specialist sector of the property market, real estate experts believe their could be an impact in the run up to the vote in September but it is likely to be short lived. For… Continue reading →

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