Dispatches « Property News from Saint Property

Saint Property Dispatch
Thursday, March 3rd, 2011

General

· The Published House Price Market indices continue to give mixed messages, primarily as a result of the variations in the data used.

· As predicted we have seen a surge of activity in the first two months of 2011.

· New stock is now coming through, particularly in Edinburgh, and early indicators show that the Country House Market will show a significant increase in supply in 2011.

· The Land and Estates Market is showing significantly more supply in the first quarter than previous years. Traditionally these properties have not shown themselves until Q2/Q3.

· The Private Sale/Purchase will have an increased Market Share in 2011.

· Inflation continues to rise, principally driven by higher fuel and food prices. January’s increase in VAT hasn’t come through the system as yet.

· Bank of England has kept base rates at 0.5% but faces the dilemma of whether to increase rates or maintain the present rate. An increase in rates could pressurise any economic recovery.

· Psychologically even a small increase in interest rates may move those sellers sitting on the fence to come forward into the market.

· According to e.surv, the UK’s biggest distributor and manager of valuation instructions, the average loan-to-value (LTV) hit a two year high in December, but at 58.9% is still well below the peak of more than 69% in 2006.

· Its data shows there is a big difference in the generosity of lenders towards those who are buying bigger value homes and those at the cheaper end of the housing market. Those buying homes valued at more than £500,000 have seen LTVs increase by up to 14% since the market troughed in December 2008. They can borrow virtually the same amount they could before the start of the house price crunch in the summer of 2007.

· In contrast, people buying homes worth up to £125,000 have seen LTVs increase by just 6%, and the proportion they can borrow is still 9% less than it was before 2007.

· As we look forward to 2011, there is no doubt that the Scottish Property Market will face its challenges, however, we feel it will be an exciting year, full of opportunities for the committed buyer. These opportunities are there now if you know where to look…..

Environmental

· As a reflection on Scotland’s vast resources for offshore renewables, Spanish wind energy developer Gamesa plans to invest 50 million euros in Scotland starting with a technology centre in Glasgow. The company wants to be closely involved with the development of the UK’s offshore wind farms.

· Gamesa is now the leading wind energy developer in Spain with 50% of the market share.

· The Government will review the Feed In Tariff (FIT) Scheme for small scale low carbon electricity (up to 5 mw).

· Consideration will be given to all Tariff levels.

· Expect support to be reduced, however tariffs will remain unchanged until 2012. Changes will effect new entrants not existing ones.

· A Scottish Natural Heritage (SNH) recent report concluded that the proportion of Scottish land which could be counted as being “without visual influence of built development” fell from 31% to 28%. This is principally a result of wind farms and powerlines.

Edinburgh Property

· A city with a living past, exceptional job amenities and a cultured, contemporary world view continue to make Edinburgh one of the most sought after cities in the UK to live.

· Figures released on 1^st February 2011 from the Registers of Scotland (RoS), however, show that Edinburgh was overtaken by East Dunbartonshire (which includes the affluent Glasgow suburbs of Bearsden, Milngavie, Lenzie and Bishopbriggs) as the local authority area with the highest average price.

· The average price of a property in East Dunbartonshire now stands at £216,644, a rise of 10.5%, compared with the same time last year. Edinburgh recorded an average price of £216,597, an average increase of 3.9% over the year.

· Edinburgh properties remain in demand, in particular, those in the New Town, the Grange and Morningside and these were generally achieving good prices in 2010.

Stamp Duty land Tax (SDLT)

· Remember the new SDLT top rate threshold is introduced on 6 April 2011. SDLT rises from 4% - 5% on property purchased for more than £1m.

Saint Property Dispatch 4 November 2010
Tuesday, November 9th, 2010

Property Prices

· There continues to be conflicting reports on the state of the property market with some reports advising a rise in property prices and number of sales, whereas the latest report from property website “zoopla “ states that 36.4% of sellers in Great Britain have reduced the amount they are asking for their property at least once since August, with the average person knocking 6.1% off their original asking price, the equivalent of nearly £16,000.

· The reductions are being made in response to a shortage of buyers, as many people adopt a ‘wait and see’ approach until the outlook for both the property market and the wider economy become clearer. But sellers are continuing to come to the market, creating a mis-match between supply and demand and putting downward pressure on prices in certain sectors.

Rural

· Scotland’s Environment Minister, Roseanna Cunningham, announced on 3 November 2010, that she proposes an amendment to the Wildlife and Natural Environment (Scotland) Bill (WNE) to introduce “vicarious liability”. This would mean that Estate Owners could face £5,000 fines or jail sentences from the persecution of birds of prey.

The amendment would, for the first time in the UK, make landowners directly liable for wildlife crimes committed by their employees, after confirmed cases where rare birds of prey have been allegedly deliberately killed to protect grouse stocks on shooting estates.

The Scottish Rural Property and Business Association (SRPBA), which represents many of the countries largest landowners, will loby ministers on 5 November 2010 and warn such legislation could cut investment in grouse moors, an industry worth £23m a year to Rural Scotland.

· A new initiative to help Scottish livestock farmers fully realise the economic and environmental potential of their woodlands is being launched next week by Quality Meat Scotland and the Forestry Commission Scotland. Both organisations want to investigate how the economic benefits of woodland can be maximised while stock numbers are maintained on Scottish farms.

Focus meetings, starting on 9 November 2010, will offer the opportunity to view real-life examples of managed woodlands and discuss with the farmers and specialists the successes and challenges of combining forestry with stock keeping. The meetings will be of interest to farmers, foresters, advisers and rural policy staff.

The initiative, which is being facilitated by SAC, will also look at technical issues such as the potential animal health benefits of putting woodland barriers between neighbouring stock, assessing where shelter woods should be located to benefit livestock, as well as any other woodland or livestock farming topics raised by attendees.

Renewable Energy

· In addition to Scotland’s renewable electricity target for the next decade being raised from 50 per cent to 80 per cent, which First Minister Alex Salmond announced at the end of September, it was agreed on 2 November 2010 at the Renewable UK Conference in Glasgow that the Scottish Government were launching a £70m fund to help support the offshore wind industry over the next four years.

The money has been diverted from other priorities of Scottish Enterprise and Highlands and Islands Enterprise. It will be used to improve ports and help companies testing, manufacturing and supplying materials for turbines.

The Scottish government hopes the investment will help Scotland realise the potential of creating 28,000 direct jobs and generating £7.1bn for the economy over the next decade.

· Siemens, the leading provider of off-shore wind farms in the UK, has joined forces with REpower and Weir Group to launch the UK’s first wind turbine apprenticeship scheme to tackle the engineering skills shortage in this area.

· This increase in the amount of wind energy generated in Britain will have a significant effect on buyers of rural property in Scotland.

· Future planning for wind farms can have a positive or negative effect on property values, depending on the types of property, with some buyers desperate to avoid having their views obstructed, while others are looking for opportunities to take advantage of new renewable energy targets.

It is crucial for those looking to avoid purchasing a property in the vicinity of a planned wind farm that they carry out thorough research first or seek expert advice.

Edinburgh Properties

· Previous reports suggest that the average property price in Edinburgh is circa £230,000 with average earnings at approximately £28,000 equaling a P/E ratio of 8.2. Current UK P/E ratio is reported anywhere between 5.5 and 7 with the long term average being 3.5.

· With the first-time buyers market struggling: lenders requiring a minimum deposit of 10% and the most competitive deals achieved with 30% deposit, the ESPC have advised that the majority of first-time buyers are relying on financial assistance from their parents to get them onto the property ladder with many parents enquiring about the possibility of remortgaging their own homes in order to provide their children with a deposit.

Saint Property Dispatch. 6 October 2010
Wednesday, October 6th, 2010

General House Price Predictions

· September has proved to be a fairly uneventful month in the property market. Total house prices in the UK edged up marginally by 0.1%, according to the Nationwide House Price Index released 30 September 2010. Scotland, however, showed a 3.4% fall in Q3.

· Where the market will go next depends largely on the number of properties coming to the market and how keen new sellers are to secure that sale. If sellers are in no rush to sell then prices will remain fairly static but transactional activity will fall.

· The prospect of deep government spending cuts and uncertainty over the economic recovery coupled with the Bank of England’s prediction that lending criteria will continue to tighten for the remainder of 2010, is likely to make the last quarter of 2010 difficult.

· A likely interest rate rise in 2011 could result in some sellers being persuaded to drop their prices.

Rural Properties

· The Scottish Government plans to reform Agricultural Tenancy Laws to make it easier for new entrants to get into the farming sector. The proposals look to encourage landlords to let more land by introducing flexibility into Limited Duration Tenancies (LDT’s) and Short Limited Duration Tenancies (SDT’s).

· According to a report this week by the Home Grown Cereal Association (HGCL) the UK has produced a good corn harvest this year with grain quality likely to improve on the three-season yearly average at a time when EU crops are suffering, giving the country a strong competitive advantage on world export markets.

· Russia harvested 88% of the forecasted area and reduced barely production from 17.7 million tonnes to 8 million tonnes reflecting the difficult harvest.

Single Farm Payments

· The exchange rate has been set at 85.995p. This is down from last year’s payment of 90.93p and reflect a 5.4% decease from last year, however, recent currency movements mean that Scottish Farmers will receive more in subsidy than they may have calculated a month ago.

Home Reports

· Recent reports suggest that the introduction Home Reports in Scotland have inflated the Property Market, however, a publication by the Scottish Government released on 1 October 2010, states that over 60% of buyers surveyed in the first year of the Home Reports introduction found the single survey useful and over 1 in 5 buyers found the energy report and property questionnaire useful.

· This research covered the first year of Home Reports from December 2008 – December 2009. Opinion may have shifted as we approach the end of the second year.

· It is estimated that 151,517 Home Reports were completed in Scotland from December 2008 to August 2010. This is based on Energy Performance Certificates from marketed sales.

Edinburgh’s Green Space

· In September, Edinburgh received the 2010 Beautiful Scotland City Trophy which focuses on Horticultural Achievement, Environmental Responsibility and Community Participation. Organisers believe that the awards have led to an increase in civic pride in the community, as well as making the area a more attractive place to live, work and visit.

· Most of the city centre green spaces and gardens are private, however, following the success of the development of St Andrew’s Square gardens an updated Open Space Stategy, agreed by City Councillors on 30 September 2010 ,will lead to a review of the City’s other private gardens next year. The gardens of Rutland Square, Charlotte Square and Queen Street are possible considerations for becoming “Open Spaces.”

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