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Edinburgh prime housing market heads sales growth in Scotland
Estate agents in Scotland had expected to see a house price boom following the No vote in the independence referendum last September but this has not happened, it is claimed. However, there are some areas that are doing well, according to the annual Scottish Property Briefing report from Strutt & Parker. It says that the luxury new build market has definitely taken off in central Edinburgh and the firm forecasts continuing growth in this area. It also predicts a 4% to 5% growth in the £400,000 to £1 million mature markets, although selling properties over this price will continue to be challenging and there is likely to be 0% growth in this area. Last year there were 66 house sales of over £1 million in Edinburgh, which represented almost half of all Scottish properties in this range, of which Strutt & Parker sold almost 20% including one house at almost £4 million which is one of the Scottish capital's most expensive sales in recent years. According to Blair Stewart, who heads up the firm’s Edinburgh residential department, despite the new Land and Buildings Transaction Tax and continuing political uncertainty there are still many people willing to invest and live in the city. In the Country House market over the last year there has been a 27% increase in prime market transactions of £400,000 and over. Areas that have performed well have been those within commuting distance to Edinburgh, with a 50% increase in transaction numbers in Fife, a 69% increase in the Borders and an 85% increase in Midlothian. ‘The legacy of the Referendum continues to affect the prime country house market with continued uncertainty. Land and Buildings Transaction Tax will cause the top and middle of the prime market to readjust and capital values are expected to reduce by 2% to 4%,’ said Malcolm Leslie. ‘It is also expected that some would be buyers will make the most of their existing home by extending or renovating rather than moving home and incurring the increased tax. The quality of life that a Scottish country house can offer, together with the increasing value gap between southern England and rural Scotland, will encourage inward investment,’ he explained. ‘Finally I predicted that with the stability in the macro economic situation, the long term prospects for growth in the prime country house market look good,’ he added. There are two major factors affecting property prices in the UK, according to Stephanie McMahon, head of Strutt & Parker's research team. ‘Emerging countries with weak institutions has led to a flight of money from these markets to places such as the UK that has, for example, very strong property rights,’ she said. ‘Secondly, the population growth and rise in single person households leads to demand outstripping supply. However, the country as a whole is affected differently. Prices in London have risen by 35% since 2007, yet in Scotland it has fallen by 7%,’ she added. She pointed out that… Continue reading
Specialist lending set to see growth among UK home buyers
Specialist lending is predicted be one of the key battlegrounds in the mortgage market over the next two years in the UK with new lenders launching and High Street providers targeting the sector. A new survey has four the nearly two thirds of brokers expect new specialist lenders to open for business while another 13% of intermediaries believe High Street lenders will wake up to the potential for growth and offer specialist services. Around 60% of brokers believe specialists will take a bigger share of the mortgage market over the next two years. The scale of demand is underlined by brokers’ views as around half believe that 20% or more of their clients would benefit from applying to a specialist lender. In the past year two out of five brokers say 20% or more of their clients have had difficulties proving their income. However high rates in comparison to the ultra-low deals offered by High Street lenders are seen as the most significant barrier to the expansion of the specialist market and 52% of brokers highlighted rates as the major issue ahead of 47% who say regulation will be the main brake on growth in the specialist market. Indeed, some 32% say clients lack of understanding of the specialist market could also constrain growth. However, just 15% of brokers say their own lack of understanding of specialist options will hurt the market. ‘Industry figures show that intermediary market share is increasing and we expect the significance of the specialist market to grow,’ said Steve Griffiths, head of sales and distribution at Kensington. ‘Our experience over 20 years shows that homebuyers and remortgage clients do not all fit High Street criteria and while they will be entirely creditworthy may have issues with proving income which applies to the self employed and also those in full time jobs,’ he explained. ‘The focus on rates is important but there is also a real need for advice and individual underwriting which is why Kensington will be investing in providing support brokers to help them identify and place specialist cases,’ he added. The research also shows that around 37% of brokers believe the specialist lending market will be constrained by a lack of capacity to lend. However just 22% believe reputational issues will hit growth. Continue reading
US home builders using new data analysis to decide where and what to build
A proliferation of data and new data analysis methods are changing the way builders in the United States buy, sell and develop vacant land, according to experts. Builders are cautiously optimistic that easier credit and more flexibility will help the new homes market rebound in 2015, according to experts at a building and building products symposium in New York. The state of the land market, a key factor in determining what kinds of housing gets built, where and at what price, was a common theme throughout the various discussions. ‘The real opportunity of land goes beyond the land itself. Builders are looking at land as much more than a piece of dirt now,’ said Steve Benson, chief executive officer of Phoenix based land banking and advisory firm Community Development Capital Group. Landowners and buyers alike are using multiple data sources to examine what is being built in other areas, which designs work best for certain parcels and which builders are best suited to maximize certain features of a given piece of land, Benson explained. Rather than building a certain set of homes on a given piece of land, developers today may be more apt to sell their land to a different type of developer rather than undergo a project themselves, or choose to build a different type of home than they normally would, based on data, he pointed out. ‘Real estate has always been about location, location, location. But with land especially, it’s future location, future location, future location. Today, data helps inform that equation for builders much more than in the past,’ he added. High land costs, and perhaps unrealistic value assessments by landowners, are a big reason why developers are having difficulty developing more entry level, lower cost communities and homes, according to Greg Vogel, chief executive officer of the Land Advisors Organization, an Arizona based land brokerage. Developable tracts of land appreciated very quickly in value during 2012 and 2013 in anticipation of a building boom in 2014 that largely has yet to materialise, he explained, adding that strong recent years have convinced today’s land owners that their land may be worth more than it is. As a result, builders are increasingly forced to put higher prices homes on developments they do control in order to recoup their higher land acquisition costs. This will create challenges for larger builders looking to cater to lower end and first time buyers, who are expected to enter the market in higher numbers in coming years. ‘Most observers agreed that it’s just a question of time until we see millennial demand pick up. If the entry level buyer does come back, I’m not sure there will be a lot of opportunities to develop those kinds of communities right away,’ Vogel said. Beyond the kinds of large, multi acre sites on the edge of cities and towns favoured by big, publicly traded home building companies, smaller lots located in downtowns and established communities also represent… Continue reading
