August 1st, 2008
After many months of pretty depressing news in respect of house values, mortgage costs and falling sales, householders suddenly received three bits of good news in as little as 48 hours.
The first piece of news did not make many headlines - but possibly was actually the most encouraging of all. Not many homeowners will ever have had much to do with the LIBOR interest rate. This is the rate on which loans between banks are costed - and for the first time for many months this rate reduced significantly last week. This will make inter bank lending that bit cheaper and it has been the banks unwillingness to lend to each other which has been a main cause of the tightening of credit for the consumer.
Secondly and following hard on the heels of the news the LIBOR reduction - mortgage rates started to drop of the consumer. First the Halifax, then a group of lenders including the Bank of Scotland and the Newcastle Building society all announced rate cuts on a range of products. Other lenders are expected to follow suit - prompting some observers to suggest that the “credit crunch” has at least peaked and a gradual return to more normal conditions has already started.
Thirdly the National Housing Federation has just predicted a massive increase of 25% in house prices in England and Wales by 2013. The Federation bases its predictions on an increasing demand for households caused by social trends such as longevity, coupled with limited supply.
All and all this information can only encourage householders, who have been a beleaguered species recently. David Borrowman Caesar and Howie managing partner comments “We have little doubt that housing assets will go up in value over the medium term. All the data we have, increased longevity, immigration, different family groupings point to increasing demand over time for houses. Perversely the current slow down in building units will simply fuel higher price rises in the future, once the current difficult market conditions start to improve”
Tags: housing market, interest rates
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July 16th, 2008
Further evidence that Scotland is bucking the UK trend of falling house prices can found in the recently published Royal Institution of Surveyors (RICs) report.
It states that 59% of its members reported that house prices in their area have remained static. In fact 4% of its members actually reported price increases.
This compares favourably with the English market where 78% of its members have reported falling prices in London, with percentage increasing in South East England and West Midlands to over 90%.
Further trust in the Scottish housing market can be found from the Nationwide Building Society figures which show Scotland as the only region out of 13 regions within the UK where average house prices rose in the 12 months to mid-June.
Tags: House Prices
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July 15th, 2008
The Council of Mortgage Lenders (CML) has come up with a new policy which they hope will rescue the housing market. They are currently pressurising the government to adopt the policy.
The CML have stated that the biggest problem of the stagnant housing market is the lack of mortgages which are being made available to the general public and in particular first time buyers.
The innovative plan drawn up by CML differs from previous policies suggested as it will be the investors themselves who will retain the credit risk and the government will not be required to guarantee the scheme.
The CML hoped that the government would agree to this new proposal as they were confident that if adopted it would allow the housing market to recover quickly.
Tags: housing market
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June 12th, 2008
The release of figures from the Government confirms the resilience of the Scottish house market. The Communities and Local Government department have issued its house price index for the year to April 2008 and they show annual house price growth at 7.7% in Scotland to be the highest for any region in the UK. However this does also show a price growth rate slower for Scotland than in the precious year which had been 9.3%. Within the UK figures as a whole there is shown to be a drop in the prices of flats of 0.3 per cent.
John Renton senior valuer at Caesar and Howie confirmed the figures reflected local experience in the Central belt. I think in most of Central Scotland prices are more affordable in terms of their relationship with incomes than in other parts of the UK. That’s what keeps the Scottish market from big ups and downs in my view. On the other hand continued John “I think the data is a little out of date and I think prices are pretty static at the moment. Sellers need to price sensibly and be patient to get their houses away”.
Tags: housing market
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June 3rd, 2008
Scotland’s housing market is cooling like elsewhere in Britain, but with the nation’s most affordable mortgages experts think it may escape the worst of the property downturn as it did in the 1990s.
While the average house price in Britain fell 1 percent in the first quarter of 2008 compared to the previous three months, Scottish house prices registered a 0.2 percent rise, according to the Halifax house price index.
“Scotland’s housing market is in the strongest position in the UK and will be more resilient, mainly because of affordability,” said Fionnuala Earley, chief economist at the Nationwide building society.
Professor Steve Wilcox, author of the UK Housing Review, said the profile of the Scottish economy and labour market in the 1990s differed substantially from the rest of Britain. This shielded it from the worst of the housing crash that began in the late 1980s and hit the Southeast the hardest.
But now, Wilcox said, the two economies and the housing markets were more in tune than before.
“The dynamics for Scotland are very much the same as in the rest of the UK: sharp rises in house prices and mortgage costs, as well as an increase in private renting,” Wilcox said.
Nevertheless, he said there were still factors that could cushion the downturn.
One is the fact that house prices in Scotland have not risen as steeply as in other parts of Britain. Over the last decade, house prices in Scotland have risen 146 percent, versus a 191 percent rise in Greater London, according to the Halifax house price index.
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June 2nd, 2008
The momentous decision taken by the Law Society of Scotland to allow new business models for legal firms has been warmly welcomed by Caesar and Howie. The changes which will probably take about three years to come into force will allow Law Firms to be owned or part owned by non -lawyers. At the moment only lawyers may own their firms and they cannot work as part of a wider company or partnership.
Some commentators have suggested that this change will cause the demise of the local “High Street” lawyer.
However David Borrowman - managing partner of Caesar and Howie sees things differently. “This I see as a great opportunity for our firm - not a threat. We have been expecting this decision for some time and we have been working to ensure we are ready to take the opportunities which it brings. We have excellent expertise in various areas of our work and we are sure if others wanted to work with us they would bring in their expertise to the mix. The bottom line is to ensure our clients enjoy the best service we can give them and if that means working in a different way with new techniques and in new structures we are very much up for that”
David continues “The Law Society will insist in their forthcoming work, that any new structures must contain safeguards to ensure no conflict of interest can arise and that lawyers must continue to put clients interests first. Provided that ethical framework remains think how firms law could be transformed for the better by the injection of new investment, new ideas, and modern marketing methods. The next few years will be challenging and interesting times for us all”
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May 30th, 2008
Slightly better news for hard pressed buyers is the return of that endangered and maybe even thought to be extinct animal - the 100% mortgage. The Bank of Ireland have stepped back into the market with a 100% loan product. Sandy McFarlane - long time mortgage advisor at Caesar and Howie, cautiously welcomes the news. “It is encouraging to see some better news for buyers. However - folk shouldn’t get carried away just yet. This is a niche product with fairly strict requirements including having a guarantor. So the product will have a limited market I think - but it will still get some first time buyers back in buying mode. And who knows - once one lender comes back in maybe others will follow.”
If you wish to know details of this or any other mortgage product currently available - call Sandy on 01506 815900.
Tags: mortgages
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May 27th, 2008
The momentous decision taken by the Law Society of Scotland to allow new business models for legal firms has been warmly welcomed by Caesar and Howie. The changes which will probably take about three years to come into force will allow Law Firms to be owned or part owned by non -lawyers. At the moment only lawyers may own their firms and they cannot work as part of a wider company or partnership.
Some commentators have suggested that this change will cause the demise of the local “High Street” lawyer.
However David Borrowman - managing partner of Caesar and Howie sees things differently. “This I see as a great opportunity for our firm - not a threat. We have been expecting this decision for some time and we have been working to ensure we are ready to take the opportunities which it brings. We have excellent expertise in various areas of our work and we are sure if others wanted to work with us they would bring in their expertise to the mix. The bottom line is to ensure our clients enjoy the best service we can give them and if that means working in a different way with new techniques and in new structures we are very much up for that”
David continues “The Law Society will insist in their forthcoming work, that any new structures must contain safeguards to ensure no conflict of interest can arise and that lawyers must continue to put clients interests first. Provided that ethical framework remains think how firms law could be transformed for the better by the injection of new investment, new ideas, and modern marketing methods. The next few years will be challenging and interesting times for us all”
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May 27th, 2008
Never has the “House Market” been more in the news than it is now. But so far all the articles I have seen are about houses as a financial investment and whether prices will go up or down. Generally the slant on these articles seems to be it is bad news for prices to go down and good news for them to go up. Certainly there are many in the market to make money one way or another but perhaps many commentators miss the fact that this is a market mostly for homes for families and individuals. This is not a straightforward commodity market. It therefore seems to me that most buyers want a suitable home first and foremost with the secondary hope that it might appreciate in value somewhat over their lifetimes. Long term social trends in this country with smaller, different and more regularly changing family units would tend to suggest a move over time towards more households. Similarly increasing longevity and immigration would seem logically to add through time to housing need. So my feeling is that subject to fluctuations here and there the probable long view is that houses should appreciate in value.
If that is right buyers and sellers alike should not lose confidence in the market but respond sensibly to what seems to be happening in the short term. Currently in the short term the house market looks to be becoming a little smaller with fewer transactions taking place - and to have changed from the rampant sellers market of the last few years to a buyers one - where what pressure there is on prices is downwards.
In this scenario if you start looking at the market from the “home” perspective things look a bit different and more encouraging than perhaps most current commentators are saying. For example newcomers to the market will gain should prices fall. Again if someone owns a property and wants a bigger one - things get better if prices drop. Say prices drop 5% and your were intending selling at say £150 k and buying at about £250k your sale price drops by £7500 but your purchase price drops by £12500 - so you gain - and the higher up the scale you are the more you gain. Usually people trading up are doing so to accommodate the arrival of new member of the family - they are not moving just to make money. Losers in a market where prices are falling would be people trading down - but these tend to be older people who have been in their house a long time and whose mortgages are paid off. So the loss here is generally a paper one anyway as opposed to an actual loss of cash.
Possibly the only real losers may be those who buy with a large mortgage and have to move or sell at a time outwith their control when prices are falling. They may have just bought - then lost their job or have to move job forcing them to sell. This group would suffer on a price fall - but how many homeowners come into this category - probably not very many.
My feeling is that long term prospects remain good in this market, but care must be taken because of the short term buyers market we are in. The short term difficulties are causing delayed sales and creating English like chains where deals are not finalised till the last minute. For sellers that mean selling before you buy and even being prepared to take temporary accommodation before completing your purchase. It also means being patient in the sales process and completely sensible on prices. For buyers it means not paying too much now and also not buying in the hope that a quick sale on can deliver a profit in no time - that will not happen. It means leaving a little spare in the budget to cope with mortgage costs maybe rising. Finally It also means being prepared to see your new property as first a suitable home for you and your family now and only over time a financial investment.
Tags: housing market
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May 12th, 2008
The Scottish economy is being buoyed by the housing market, it has been claimed.
According to a forecast released today (May 12th) by the Bank of Scotland, the economy will see an upturn in growth next year, the Scotsman reports.
Factors contributing to Scotland’s economic growth include consumer confidence, good car sales and a healthy housing market, the news source states.
Martin Ellis, chief economist at the Bank of Scotland, explained that the historically low interest rates “continue to fuel strong demand for new housing”.
This was indicated recently in the Bank of Scotland House Price Index, which showed that the average Scottish property price had increased by 20 per cent to £82,000 during the past six months, while Edinburgh was found to be the most expensive place to buy a house in Scotland.
Furthermore, Edinburgh was found to have sold the most million pound properties in the northern regions of the UK in a recent Halifax study.
Tags: economy, property, Scotland
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