Figures show house sales on the rise
IN Caithness, after a strong start to the year house sales flattened somewhat but revived again about a month ago. In the last two weeks we have had acceptable offers for around 15 properties. This is a significant uplift in the market. Last year was fairly appalling and so it is an improvement from a very low base, but there is hope.
Buy-to-let is still the strongest market and first-time buyers, but this has allowed a number of our clients to move up the ladder. Plots remain difficult to sell.
On the wider scene it looks like if a buyer wants a mortgage they should go to a building society. Gross lending in the first four months of 2012 rose 36 per cent compared to the same period in 2011.
Adrian Coles, director general of the Building Societies Association, said: "Mortgage approvals were strong in April, running well above the previous six-month average. This clearly indicates that mutuals will continue to be active lenders to home buyers in coming months."
This compared to banks where mortgage lending was down in the first three months of the year, compared to last year.
Many offers received are subject to mortgage. In the "good old days", it would take only days to have that mortgage confirmed, but currently you can be talking six weeks before the bank sends the solicitor the mortgage papers. Until that point, the offer is worth little more than the paper it is written on! It just shows that lenders are still very nervous.
FIRST-time buyers are accounting for 42 per cent of the house purchase loans in Scotland, the highest since 2001 and the same proportion in the UK as a whole. Since it has always been said that it is the lack of first-time buyers that is preventing the market kick-starting, this is intriguing.
Certainly my own experience is that it is the lower-value properties which are selling – although this is not only to first-time buyers but also to buy-to-let investors. The re-entry of the first-time buyer into the market is reinforced by the fact that the Council of Mortgage Lenders reports that in 2011 the average first-time buyer in Scotland paid 12 per cent of their income in mortgage payments, much reduced from 18 per cent in 2008.
First-time buyers can expect to borrow 80 per cent of the house value whereas other borrowers, further up the housing ladder, are borrowing 70 per cent. Higher loans to value are available, however, if you shop around.
In the North, first-time buyers are also helped by the fact that prices continue to fall. We have always had our own market which usually bucked the national trend. The Scottish situation is that after falling by around 12 per cent from their 2008 peak by March 2009, Scottish house prices regained some ground into 2010 but have been treading water since then. In March 2012, Scottish prices were 7.1 per cent down from the 2008 peak. There are some places in Scotland where prices are rising which skews the statistics... sadly, not here!
As for the future, the RICS April survey found that more surveyors expect Scottish house prices to fall than rise over the next three months. It is certainly a mixed picture but market sentiment is better than it was last year. Certainly at this very moment, we are experiencing much more interest and successfully converting this to offers than this time last year.
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He has over 25 years’ experience and is principal solicitor and estate agent at Georgesons, Wick and Thurso. Follow him on Twitter – @BrucedeWert – and Facebook – MyScottishLaw.