November 18th, 2008
From the 1st December all properties sold in Scotland will require to have a Home Report made available to prospective purchasers.
Caesar and Howie have no particular issue with the concept of Home Reports – if someone wants to produce a report in the belief that it will help a sale that is fine. However we do object to the compulsory nature of these reports and to the fact that sellers will be subject to criminal charges should one not be produced by the seller.
This seems grossly unreasonable to us. The effect of this legislation is to ensure that sellers will have to incur several hundred pounds of costs before even being able to market a property. This seems wrong and unnecessary to us and we note with interest that the English equivalent of these reports have been seen as a resounding failure – with many now calling for the legislation requiring them to be repealed.
However despite our own views we will ensure that clients are able to obtain a Home Report as part of our property sales service. The reports themselves split into three sections – the survey, the energy performance certificate and the property questionnaire. The first two sections will be completed by surveyors who have obtained energy performance assessor qualifications and the last section the government envisages will be completed by sellers themselves. The “survey” section of the report will be similar in form to the old “Type 2″ survey, giving details of construction, necessary repairs and the surveyor’s valuation. The energy performance section will give an idea of the energy efficiency of the property and potential improvements possible.
The property questionnaire is a section which is intended to give other general information about the property and its usage – including the various rights of access and servitude rights attaching to it. Effectively this last section will contain an amount of legal information which can only be accurately obtained by examining the title deeds to the property. For that reason Caesar and Howie qualified legal staff will obtain titles for clients assist them in the completion of that part of the report. We think it important if these reports are to be of any use at all that the correct information is entered into them and our legal staff will help ensuring that this is the case where our clients are involved.
Home Reports with legal input can therefore be obtained from Caesar and Howie for all houses going on the market after 1st December 2008. Credit arrangements will be available to those clients wishing this.
Tags: Buy a house in Scotland, Home Reports, Selling a house in Scotland
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September 19th, 2008
The Caesar and Howie Group, who have offices throughout the central belt, achieved huge prominence at the Scottish Legal Awards held in Glasgow on 18th September. Nominated in no less than four categories the firm lifted the prestigious “Conveyancing Firm of the Year” award, fighting off competition from bigger city centre firms.
Not content with one award the firm then went on to win the “Up and Coming Firm of the Year” trophy, sparking off a night of celebration for the partners and staff attending the glittering awards evening.
Senior partner Ivor Klayman commented “I am delighted to have won these awards. We have a great group of people in Caesar and Howie and we work extremely hard to ensure we give the best possible service to clients and also to ensure that we are as modern and forward thinking as we can be. It’s nice to receive recognition from our peers for that.”
Tags: Scottish Legal Awards
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September 15th, 2008
House market report
We realise how the trying times in the property market are affecting everyone in your position. It is very difficult trying to sell houses at the moment. The house market is often in the media spotlight and hardly a day goes by without some report or other making this or that prediction. Some of these reports are based on National UK data and may have limited application to the local market. I thought it might be helpful to pass on to you the considered view of our partnership on what we think is happening - and how things might develop in the future.
Current Sales
The first thing to note is that there has indeed been a big slump in the market in the Central Belt this year. Some agents and organisations are stating sales are down we understand by over 60%. Our own figures show a slump of 31% - so we seem to be doing better than many but these are still unprecedented drops. Nothing like this has been seen in Scotland before.
Number of Buyers
The reason for the slump is very clear however - it has been wholly caused by the “credit crunch” which has severely limited the ability of buyers to get mortgage funding. We have noticed no lack of willingness in the hundreds of potential buyers for whom we act to go ahead and buy - but many have been frustrated by not being able to get enough of a mortgage. Many of these buyers we believe will come back into the market when they can.
Prices Currently
If anything we think prices are certainly not going up (despite some earlier newspaper reports) and at best they are stable or trending down. ESPC is intimating their figures show a drop year on year of 6.5%. Our own records suggest that that is probably about the biggest fall we have seen.
Will prices fall badly?
The truth is we do not really know. Our feeling is that prices in the central belt will probably not fall very dramatically provided that there are no mass job losses in the region. We think that the will to buy is still there and there is pent up buying demand which has been held back by lack of mortgage availability and also by inability to sell. When buyers feel more secure and can get the money - they will come back into the market. Where there may be bigger price falls might be in particular areas where there is clearly oversupply. For example some parts of Edinburgh and Leith have a huge number of modern flats available with many fewer buyers in that sector than was expected.
Is there any positive news?
Well actually there is a lot of positive news - all of which has started to come out in the last few weeks only.
- Mortgage rates have come down to pre credit crunch levels
- Mortgage availability has dramatically improved - even 95% loans are back
- Stamp duty has been cut for house purchases up to £175,000
- Government help is available more quickly for mortgage arrears
- Further mortgage rate falls are predicted in the future
We believe all these factors coming together are going to ensure buying demand picks up again. Whether it all starts to move again quickly or gently and when exactly we see the effects, we do not know - but buyers will be back. The current market turmoil is unprecedented but people still need homes to live in. We do not believe most families would be happy to rent all their lives - and indeed rental property is quite limited in type in most areas.
What can sellers do to help?
We think there are two key issues here in this market. The first is sensible pricing in accordance with what market information tells us. The days of getting huge “over the asking” prices have gone for the moment. Be realistic and remember if you hope to trade up in the market you need only offer a realistic price also when buying. The second main thing sellers can do to help themselves is to be patient. Sales are taking a lot longer across the board and sellers have to “go with the flow” on this. The market is still operating - it is far from being completely dead - but buyers are not around in volume. But remember you only need one buyer for your house, not five or six and through time that buyer will turn up and buy the house if it suits requirements and is reasonably priced.
What’s the longer term outlook for houses?
Well so many articles are written about house prices it is easy to become obsessed by price movements. The truth is over 95% of our buying clients buy a house suitable for them and their families and not just as an investment. Also most families stay in houses for several years - which means short term house price movements don’t effect them. Even now if prices are down by a few percent many people have been in houses for a good number of years and will have the benefit of several years price increases when their sale comes through. Typically if someone bought a house a dozen or so years ago the value may have gone up by as much as 300%, so a shading of the price on sale of a few percent from last years level is not great but not disastrous either.
Our view at Caesar and Howie is that at some stage house prices must start to trend up again in Scotland for various reasons:-
- Increasing population
- Increasing immigration (in particular Polish)
- Increasing longevity
- Social change creating more family units
- Reduction in new building this year will cause a future supply shortage
- The economic cycle will move back to more growth in the future
All of these issues mean increased demand for housing over time - which must logically mean increasing prices over time. Consequently in the longer term we still see houses as a good investment. Whilst we recognise that investment issues play only a small part in families’ house buying plans - it is perhaps comforting to know that in the long term buying a house will prove to be worth it financially as well as getting your own roof over the family’s head.
If we might take a “weatherman’s” view of the market I think we’d probably be saying something like “still pretty wet and rainy but conditions will improve in time and some gentle sunshine should arrive eventually in most areas”. The difficulty we have is predicting the timing of the improvement. Some commentators say it has already started, some say it will be next spring some say even later. We just do not know - which is why for now patience and realism is perhaps the best approach.
Tags: House Prices, housing market, Market Report
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September 10th, 2008
Housebuilders are to set up a code of conduct and a redress scheme for dissatisfied customers following an industry inquiry by the competition watchdog, it was announced.
The Office of Fair Trading (OFT) said its market study into housebuilders had found that while the sector was “broadly competitive”, many homebuyers experienced faults with their new property or delays moving in.
It said that while many of these faults were quickly fixed, some homeowners did suffer “significant detriment, distress and inconvenience” if there were major faults or many problems with their new home, particularly if these related to the plumbing or heating.
Read the full story at news.uk.msn.com
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September 4th, 2008
We’ve had a year of bad news on many fronts. We all first learned of the credit crunch last July and it probably took a bit of understanding for most of us. Then gradually we saw in dismay the effects on individuals and businesses across the country - these effects are still being felt.
In the last few months however there has been nothing but good news in the Mortgage Market. First there was that odd change in banking practice which allowed the Bank of England to step in and inject liquidity into the market. Then the Libor rate came down followed tentatively by a few mortgage rates. Recently mortgage availability improved dramatically with plenty new products available and signs of mortgage providers competing for business. Now even 95% mortgages are available and amazingly rates are down to very close to what they were when the whole process started last July when the Northern Rock was forced to go cap in hand to the bank of England for money.
On top of all that we have the Government’s “help the market” package which was criticised in some quarters but still provides definite savings for buyers in the crucial “£125,000 to £175,000″ price range. Even better news for house buyers - less good for house sellers - is the fact that house prices are down in most areas - but crucially there remain huge numbers of houses on the market. This means deals can be done and buyers will steadily become aware of that. Like all market movements there will be a turning point. Have we reached it yet? Maybe not quite, but we seem to be edging ever more closely to it and it may not be very long till the “credit crunch” is nothing but a distant and unhappy memory.
Tags: credit crunch
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September 2nd, 2008
Following on the good news of increased mortgage availability and decreasing mortgage rates, people wanting to buy a house in Scotland received another boost recently with Stamp Duty being suspended for one year on houses up to £175,000.
The Government hopes this measure will help kick start the housing market particularly at the first time buyer level, where the effects of the “credit crunch” hit hardest.
Caesar and Howie welcome the news. Senior Conveyancing partner Graham Irvine commented “it is no secret that the market is depressed at the moment - so anything which encourages buyers is a good thing. Savings of up to £1,750 on purchasing a house are not to be sniffed at nowadays”.
However, the firm feels that certain areas of Scotland will benefit much more than others. Managing partner David Borrowman feels the tax break will have uneven effects depending on where you live. “House price levels are very different across the country. For example Land register figures show that in Clackmannanshire the average house price is £130,266 whilst in Edinburgh it is £221,209. It therefore seems logical to me that in the lower house price areas a greater proportion of the houses for sale will benefit from the Stamp Duty cut. That should mean that markets where lower prices predominate will get a bigger boost than the markets where more expensive prices are the norm. From the various areas where we operate I would say Alloa, Falkirk, and parts of West Lothian, will benefit more for example than Edinburgh. But even allowing for that - we still welcome this news which should help get the market moving a little faster”.
Tags: Stamp Duty
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August 18th, 2008
Figures released by Lloyds TSB Scotland show that the Scottish house market is currently behaving rather differently than that of the rest of the UK.
The Scottish House Price Monitor shows in Scotland prices crept up by 1.6% in the quarter to end July. This contrasts well with figures from other UK regions which show prices falling. However Lloyds report also shows a large fall of 27% in the number of transactions completing.
“These figures mirror Caesar and Howie’s experience “said managing partner David Borrowman. “To the half year our sales were down by 22% from last year - but we have not yet found any significant slippage on prices. On the other hand “continued David “sellers have to realise that this is now a buyers’ market - unlike the sellers’ market of the last few years. Fixed prices are now becoming the norm, and sensible pricing with wide internet exposure of the property are keys to selling a house successfully. But most of all - sellers must be patient because house sales are taking longer to achieve. Buying a house is still a big ambition for most in Scotland and we feel that as the mortgage market comes gradually back to normal sales volume will steadily pick up again”
Tags: House Prices, housing market, Scotland
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August 15th, 2008
Despite the current property woes, an inexorable rise in house prices over the last twenty years or so has good and bad effects for all of us. One of the good effects is the ability of people to accumulate tax free capital for themselves and their family. Elderly couples then often release this capital in their latter years by “trading down” or even contracting into one of the increasingly popular equity release schemes on the market. So many older people in our society see the benefit of previous house price rises.
At the other end of the scale first time buyers particularly in the cities where prices are high are finding it more and more difficult to get into the house market at all. To help youngsters into the market many parents and grandparents are putting up deposits sometimes of substantial sums and guaranteeing mortgages to help their children or grandchildren into the market for the first time. This is a great help for the youngsters, giving them the opportunity to own a first home.
However many parents or grandparents who put up the money are not themselves wealthy, they may have remortgaged their own property to get the funds, and may even be in the position where they may need the funds themselves at a later date. In these situations it is not enough to rely on the youngsters word ‘I’ll pay you back when I’m better off”. Yet many families do rely on such promises - sometimes with disastrous consequences.
The simple fact is that if the house is in the youngsters name alone the deposit is at risk to other creditors if the youngster runs into difficulties with debt. Someone may fall ill, lose his or her job, have no redundancy insurance, a few credit card debts and before you know it the house is repossessed and the deposit grabbed by creditors. The promise of repayment is a bit hollow in these circumstances.
Yet all this can be avoided by some sensible legal steps being taken within the family at the time of purchase. Let’s imagine Mr A lends his granddaughter child B £25,000 on a house purchase of £100,000. A simple contract between A and B can be drawn up, where on any future sale Mr A gets his £25,000 back plus a quarter of the increase in price. If the house sells for say £140,000 in a few years grandfather A would get back (approx not counting fees etc) £10,000 being his share of the gain plus his original £25,000 = £35,000. Granddaughter B would still have released to her £35,000 towards her next purchase.
Moreover that contract can be backed up by a Standard security or mortgage deed over the property ensuring that in the event of any forced sale by granddaughter B’s creditors grandfather A gets his money back first, before any other creditor other than the daughter’s mortgage company.
These contracts and securities can have lots of other issues dealt with if the parties want such as payment of interest. Fees are relatively modest for the peace of mind which such arrangements can give. The principles are clear. We encourage families to take a commercial view of their arrangements and to put in place these protections where monies are changing hands but parents and grandparents want a little protection.
Should the reader wish to investigate these plans please contact Graham Irvine or Carmen McIver on 01506 815900.
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August 15th, 2008
The latest data from the Scottish House Price Monitor run by Lloyds TSB makes comforting reading for householders. In the first quarter of 2006 house prices across Scotland increased by 4%, showing an average annual increase of 13.9%.
The Scottish Market continued to show higher rises than in other parts of the UK - allowing Scottish prices to catch up a little on the generally higher English prices.
Average prices in Scotland are now £107,789, for flats, £131084 for a semi detached and £205,303 for detached houses - although there are significant regional variations from these “all Scotland” figures.
The rises appear to reflect the continuing confidence of Scottish buyers. The survey suggests that in terms of the amount paid by buyers on mortgage payments relative to net income, Scots house buyers enjoy 24% better affordability than their counterparts throughout the UK.
The local experience at Caesar and Howie seems to reflect the national trend. “Buyers are quite prepared to offer good prices for well presented properties” commented senior sales controller Kirsty Jack. “After all house prices now have risen steadily for a full five years and people believe that a good residential property in a decent location will be a good investment over time. Certainly in our offices selling and buying activity just seems to keep increasing.”
Tags: House Prices, Scotland
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August 5th, 2008
The better news for housebuyers continued this week when more lenders announced rate cuts. Following the lead of the Halifax and others HSBC and the Bank of Ireland announced rate cuts across a range of products. This means now that all the major players in the mortgage market have reduced rates in the last week. Some have also reduced costs associated with their products as well. On top of that the general tightening up of criteria for obtaining finance seems to have stopped. Sandy MacFarlane, an experienced mortgage advisor with Caesar and Howie is confident the market is starting to return to some form of normality. “Generally it seems now that lenders are requiring 10% deposit as a minimum but if you have a good job and minimal other debt most people can now get the funds they need to buy. The 10% deposit rule is a bit of a return to the old day when I started in the business! Many borrowers can come up with these sorts of sums and we find first time buyers are often getting help from relatives.”
As well as easier finance buyers are also finding properties easier to find due to the large volumes on the market and also that sellers are no longer holding out for premium prices. Kirsty Jack, senior sales controller at Caesar and Howie confirms this. “Not many closing dates are being fixed these days, and there are lots of houses now available at quite affordable fixed prices, so buyers can pick and choose. I suspect that when the market comes back to normal a lot of the prices now available to buyers will be seen to be real bargains”
Tags: mortgages
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