Property
News with Bruce de Wert
You will have noticed that whenever I report to you, I start with statistics.
Yes, they are dry as dust but I love them because they allow me to get a grip on what is actually happening out there and put my own (and your) experience into context.
Please forgive me, then, if I do quote quite a lot of facts and figures.
Fundamentally, the market is divided between those with cash and those who need a mortgage. Anything under £80,000 , in Caithness and Sutherland, is, in my view, in a market of its own because that seems to be the limit for cash buyers (probably in order to get their money producing a return in the letting market).
Beyond £80,000, however, we are all dependent upon the the mortgage market. When I last reported, I spoke about the prospects for growth in lending and that the indications were that this would be in the right direction but slow. This has proved to be correct.
For the month on month picture, Adrian Coles, Director-General of the Building Societies Association, said: “Mortgage lending by mutuals was slightly higher in May than in April, but confidence in the housing market remains relatively subdued".
Year-on-year, however, things look much better. The number of Scottish homebuyer loans in the first quarter of 2010 was up 28% by volume (36% by value) on the low of 7,600 (worth £784 million) seen in the first quarter of 2009.
You may also be interested to know that there were 3,900 loans to first-time buyers (worth £326 million) in the first quarter of 2010, a 28% decline in numbers on the last three months of 2009 (the stamp duty holiday blip) but a 39% increase on the trough seen a year previous.
I was astounded to find that first-time buyers accounted for 40% of all house purchases in Scotland. That certainly does not conform to my experience. I'm not sure what this means. Is it a reflection that the main market is so slow or has it always been such a high rate? I must find out.
Interestingly, this year, first-time buyers in Scotland put down on average a 23% deposit. This is the first time average deposits have been below 25% since the end of 2008 and is “evidence of some modest easing of affordability criteria for Scottish first-time buyers” according to The Council of Mortgage Lenders.
Kennedy Foster of the CML said:
"The pace of recovery in Scotland at first sight appears slower than in the rest of the UK, but in fact throughout the current housing cycle, market activity in Scotland has followed that of the whole of the UK very closely, but with a lag of around one quarter.
So, although the pace is slow, the trend is clear. Things are getting better.
My own experience of the market does follow those statistics. The first few months of the year were awful with buyers virtually absent. This, I think, can be put down to the fact that the stamp duty holiday meant that many buyers had brought forward their buying plans and also, of course, the abysmal weather.
I also think that uncertainty prior to the election had it's part because, almost miraculously, as soon as the election results were published, buyers came out and the market picked up and it has been going on, at a continuous but low level, since.
We have yet to see where the cuts in public expenditure will fall. I am in touch with John Thurso about this and I know he is doing his best to limit the effect. Now that his Party is in Government then perhaps we can hope for more consideration of the North than before.
If our experience is going to mirror the overall Scottish scene, there is reason for hope for a slow return to normality.
On the question of the other big market, I’m afraid to report that the English buyers did not return this year. We hoped, as in the good times, to see them at Easter but as can be seen from the quote above about the lag behind the English market, we must wait for that to pick up before we can anticipate their return. Once they can sell their properties and, thus, have money in their pockets, we can anticipate a return.
I'm continuously thinking about how to reach that particular market. As you know, I do have access to Rightmove and it's clear from the hits that your properties are being looked at but, as yet, these expressions of interest have no money behind them.
I was asking one of my clients who had come from England about where they first came across a mention of Caithness when they were looking for a house in Scotland. They surprised me by saying that it was in the Autotrader. I'm looking into that.
If any of you have any ideas on where we can cast our net with cheap but effective advertising, I would be delighted to hear from you.
That's not just a question of the English market. I never tire of thinking about how to promote the properties on my books. One area I have been thinking about are new technologies.
Telephone apps exist which would enable buyers to locate properties in the area in which they are physically present and download particulars without having to go to my offices. The only problem with these is they appear to need 3G to work properly. That network is not present in most of Caithness and Sutherland. I am still checking that out.
On the basis that many hands make light work, if you have any ideas then please email me on bruce.de.wert@georgesons.co.uk. I shall welcome them.
Bruce de Wert
Bruce de Wert has 26 years of experience and is now Principal Solicitor and Estate Agent at Georgesons, Wick and Thurso.
Anyone who would like to comment or for this column to touch on any particular matter, please email me on bruce.de.wert@georgesons.co.uk.
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