Dispatches « Property News from Saint Property

Dispatch. 29th June
Wednesday, June 30th, 2010

Agricultural Trends

On the 16^th June 2010 Scotland’s Chief Statistician released various reviews on The Scottish Agricultural Industry giving an in depth analysis of agricultural statistics. The following is of note:

Total Income from Farming Between 2008 and 2009:

Decreased by £20 million (3.2%) to £589 million.
The increase in payments and subsidies of £72 million was countered by a decrease in outputs of £63 million and an overall increase in input, other costs and consumption of fixed capital of £28 million
Production was down for most livestock sectors, with decreases in the production of beef (-2%), mutton and lamb (- 8%), pig meat (- 20%) and milk (-2%). Production of poultry meat increased (+ 3 %) and egg production remained fairly stable (+ 0.5%)
There were mixed trends for arable crops, with increase in the production of potatoes (+ 14%) and barley (+ 2%), with decreases in wheat (- 21%) and oilseed rape (- 12%). Overall the volume of horticultural production increased by 12 %
The largest increase on input costs was for fertilisers and lime (+ 30%). Other large changes in input costs include a decrease in fuel and oil (down £22 million or 21%), mostly due to a 25 % fall in the price of red diesel, and a decrease in the expenditure on animal feed (down £30 million or 7 %) mostly due to lower prices for concentrate feeds.
Capital investment in agriculture increased by £14 million (7 %), mainly due to increases in expenditure on plant machinery and vehicles.

Headline results of Farm Business Income (FBI). Average figures per farm for 2008-09

Overall, compared with 2007-08, FBI decreased by £2,201 to £38,725, as the increase in input costs (up £22,637) was greater than the combined increase in outputs (up £17,995) and subsidy and payments (up £1,839). Income from diversified activities increased by £602.

The average value of subsidy and payments was £43,618 per farm
Around 10 % of farms overall had a negative FBI, around 29 % of farms had a FBI of over £50,000.
Overall, there was a 6 % increase in total assets of farms to £895,615 while total external liabilities increased slightly (2 %) to £89,944. This resulted in a 6 % increase in net worth from £759,335 in 2007/08 to £805,672 in 2008/09.
The average diversified income for those farms engaged in diversified activities was £7,624 in 2008/09, compared to £8,758 in 2007/08. In 2008/09, 42 % of farms in the survey recorded at least one diversified activity.

Key 2009 Scottish Agriculture statistics along with selected UK and EU comparisons.

The total value of agricultural output from Scotland was £2.3 billion in 2009, representing 11.7 % of UK and 0.8 % of EU27 agricultural output.

Land designated as ‘Less Favoured Area’ makes up almost 85 % of agricultural land in Scotland, which is the highest proportion across the four countries of the UK; Wales (81 %), Northern Ireland (70 %) and England (16 %).

Total livestock (cattle, sheep, pigs and poultry) contribution to Scottish agricultural output was 43 % in 2009, which is proportionately higher than the UK (37 %) and EU27 contributions (27 %).

In Scotland, 39 % of agricultural holdings were smaller than 5 hectares in size. This compares to 41 % in the UK, and 70 % in EU27.

Saint Property Comment

We continue to see robust figures being paid for land, particularly strategic purchases.
Generally demand continues to outstrip supply for land
Where demand is weaker, in for example marginal areas, land prices are beginning to come under pressure.

Dispatch. 23rd June 2010
Wednesday, June 30th, 2010

Budget Comment

· The property market seems to have escaped the worst of Osborne’s budget.

· The 28% rate of Capital Gains Tax will be paid by higher rate taxpayers with combined income and gains of more than £54,975.

· This should not unduly affect investment in land as a means of having wealth in a secure asset.

· More land should become available in the next few weeks from those who were waiting for the Chancellors plans.

· Small rural based family businesses should also benefit from the entrepreneurs relief of 10% for the first £5 million.

· Tax advantages on holiday lets, which are subject to certain conditions, have been reinstated enabling owners to offset losses against other income. We may see wealthy professionals investing in second homes benefiting the economies of rural areas.

· It is to be noted that the increase of stamp duty to 5% for £1 million + properties from next year announced in the last Labour budget will remain.

· Also the Bank of England will have powers to restrict bank lending when it takes over much of the role of the FSA in 2012.

Value of Rural areas to the Scottish Economy

· A study commissioned by The Scottish Government has found that a net total of £65 million is spent by tourists on wildlife trips generating 2760 jobs in Scotland.

· 1.12 million trips were made every year to or within Scotland with the main aim of viewing wildlife. This form of tourism appealed greatly to UK-based visitors and Scots themselves, accounting for 56 per cent of trips.

· These statistics will be a consideration for land owners who encourage wildlife tourism and property owners who wish to take advantage of the tourist trade through holiday lets or bed and breakfast businesses.

Scottish & UK governments working together

· The Defra ministers in the UK government and Scottish Government’s Rural affairs and Environmental department meet today to discuss how they can work together on rural, agricultural and fisheries issues.

· It was recently agreed Scottish Ministers and will have a stronger role during European Council meetings to better reflect the interests the Scottish farming and fishery industries and Scottish communities in the European decision making and policy process.

· Fishing farming and food are areas where European Councils make decisions affecting Scottish property owners and it is important that they are well represented.

Saint Property

· Saint Property offers advice to buyers looking to purchase property in Scotland.

· We cover both residential & rural property ensuring a property purchase decision is made with sound advice.

· We offer a pre-property purchase consultancy service for those who have found a property but need a second on opinion. We evaluate all aspects of a property on the purchaser’s behalf and report with an unbiased view of our findings.

· Please forward this to anyone who may be interested in the Scottish property market.

· Contact us for advice on +44 (0)131 478 4533 if you are considering purchasing a Scottish Property.

Saint Property Dispatch. 9th June 2010
Wednesday, June 9th, 2010

Housing Market

May was the ninth time in ten months that saw a year on year rise in average house prices with the average house in Edinburgh selling for £230,559 an annual increase of 11.8% according to the ESPC.
The average selling time is just over three months, 6 weeks less than this time last year.
Following a harsh winter of both weather and movement in the property market the summer is already showing an increase in activity.
The lack of supply in 2009 looks set to be redressed in the summer of 2010 with more property becoming available with the top end increasingly likely to be sold off market. There are buyers ready to move quickly when a property that fits their specification is introduced to the market.
Saint Property considers this an interesting time to purchase with plenty of opportunities becoming available.
Further speculation to be held until after the budget on the 22^nd June which will have major implications for the property industry.

Mortgage Lending

The Council of Mortgage Lenders report that in the first three months of 2010 lending in Scotland fell by 33% on the previous quarter which was put down to purchasers bringing forward their purchases at the end of the year to take advantage of the stamp duty holiday which ended in December. However this was up by 28% in volume and 36% in value on the same period in 2009.
The CML policy consultant, Kennedy Foster notes that market activity tends to follow that of the rest of the UK but with a lag of around a quarter.
There are 3,100mortgage products on the market 42% more than in July 2009 but that is still 90% down on three years ago. The most significant growth has been in 5 year fixed products.
Some 85% - 90% mortgages are being reintroduced back on the market.
Many lenders are further restricting interest only mortgages with the best options available now from private banks.

Farmland

There is strong interest in farmland from strategic purchasers looking to expand their current business or those who have reached the end of role over period.
We predicted earlier in the year that more land and sporting estates would become available in the second half of the year and we are beginning to see this trend appear.
Time will tell if the discretionary purchaser will become active in the market with an appetite for sporting estates.

Saint Property

Saint Property offers advice to buyers looking to purchase property in Scotland.
We cover both residential & rural property ensuring a property purchase decision is made with sound advice.
We offer a pre-property purchase consultancy service for those who have found a property but need a second on opinion. We evaluate all aspects of a property on the purchaser’s behalf and report with an unbiased view of our findings.
Please forward this to anyone who may be interested in the Scottish property market.
Contact usfor advice on +44 (0)131 478 4533if you are considering purchasing a Scottish Property.