Spring has brought increased growth to the property market in Caithness and Sutherland.
The growth in sales that I reported last month continues. Yes, this is from a very low base and does not remotely compare with what was happening in 2008. Nevertheless, the change is very significant and growth and not something I have seem for a long while.
There is also good news in some national indicators:-
• More first-time buyers! According to the Council of Mortgage Lenders, 23% more UK first-time buyers received mortgages in January 2012 than in January 2011. Since one of the major problems with the housing market has been a lack of first-time buyers available to kickstart the market, this is genuinely reassuring.
• Lenders are offering higher percentage loans. First-time buyers in Scotland typically borrowed 79% of their property’s value in the final quarter of the year – rather better more than a year ago when it was more like 75%. Lenders offering more money is something we haven’t heard of for quite a while and is, definitely, to be welcomed.
• Better affordability. The average first-time buyer in Scotland spent 11.1% of their income on mortgage interest payments in the last quarter of 2011, lower than anywhere else in the UK. Okay, that does not take account of repaying the capital but still good news for affordability in Scotland.
• Mortgage lenders are lending more! Gross mortgage lending was 14% higher in February this year than February last year, according to the Council of Mortgage Lenders (CML) but the Building Societies Association reported even better figures, with a 28% increase for the same period. Net lending (the excess of lending over repayments) was also in positive territory unlike the previous year.
Jim Dunn, chair of CML, Scotland, commented:
“Scotland, as well as the rest of the UK, continues to see a constrained mortgage market. However, it is encouraging to see positive signs, such as better affordability for first-time buyers and a decrease in average deposits for home movers, emerging. 2012 will still be a challenging year but we hope to see the slight easing of constraints continuing throughout the year.”
I know that I am, sometimes, criticised for quoting dry statistics but they give you the true picture, if you really want to know what’s going on (some people don’t).
They doesn’t tell you the future but be suspicious of anyone who is prepared to tell you what’s going to happen because, I suggest that, behind-the-scenes, they are probably rolling bones or examining the gizzards of chickens!
Trends are what it is all about and the trends are all in the right direction, at the present time. Long may that continue.
As to what is selling and to whom, the picture is quite mixed. Most of the sales are to buyers who were previously frustrated by not being able to sell their own place and a number of them are from the South.
The spring sunshine is bringing with it strong budding growth and, although by the time you read this you read this, it will probably be freezing again, I don’t think the property buds are going to get frostbite!
Bruce de Wert is founder of online legal services MyScottishLaw and principal at Georgesons Property and Georgesons Wick and Thurso.
