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Delny House, Ross-shire: Offers over £650,000
Are we for turning?
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Druid Park House, Perthshire: Offers over
£440,000
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Archie Leslie Melville
Associate Director, Perth Office
No comment about the property market in autumn
2007 can look at the situation in regional
isolation. This autumn the property news is
dominated by the international banking sector
and how it will affect the entire UK property
market over the next twelve months.
The saying goes that if America sneezes the rest
of the world catches a cold. The US has
certainly sent a virus to the UK property
market. The big question now is whether we in
the UK will have a sneeze, freeze or squeeze, or
a combination of all three.
The banks will now be looking very carefully at
their lending criteria and this will give fewer
opportunities for borrowers, and certainly hard
pressed first time buyers. At the other end of
the market the City is looking at a £2 billion
loss in bonuses this year. This will affect the
very top end of the market.
The market so often provides an accurate weather
gauge to the financial well being of a region or
the UK as a whole. For many the problems of the
US property market seemed quite a long way off
until the repercussions hit Northern Rock. Now
all UK homeowners and buyers are being affected
by a credit squeeze and falling market
confidence.
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Perhaps the UK government guaranteeing
investors’ funds in Northern Rock and the US
bringing down interest rates by 0.5 per cent
will help, but there seems little doubt that the
UK is in line for a period when house prices
have to settle to a level that reflects the
banks’ and building societies’ new, harsher and
in some cases, more responsible attitude to
lending.
So after a fairly long period of property
inflation and a buoyant market what should we
expect from these new market conditions? Each of
us looks for a good result when we are active in
the property market, but the reality is that
most of us buy well in a slow market and sell
well in a buoyant one. Rarely do we get the best
of both worlds. This market will favour buyers.
Yet all is not lost for sellers. This is not the
1980s. Employment is relatively high. Interest
rates are still relatively low. Industry leaders
don’t foresee a hard landing in the property
market, rather a soft one. In addition, Scotland
has never experienced an overall crash in values
like our southern counterparts and this time
round is unlikely to be any different. Perhaps,
at worst, a period of stagnation.
But sellers will have to realise that any gains
they make will most likely be in buying their
next property and that they will have to be
sensible with their own asking price to avoid a
prolonged and frustrating period on the market.
They will also have to make every effort to
ensure that their property looks at its most
appealing and certainly more appealing
than other comparable properties being sold
locally. Then, with some flexibility in
negotiating, even in a challenging market the
chances are good that they will be able to move
on, while their neighbour’s For Sale board
remains - familiar and weather-beaten.
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