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A
General Election always dampens the property
market whilst the electioneering takes place and
this year was no exception with a marked
reduction in activity during the spring. The
result of the election produced no surprises and
a Labour Government at Westminster has
traditionally favoured the property market as
investors plump for property rather than stocks
and shares. There are however a number of topics
which are high on the political agenda.
The first is the increased Stamp Duty threshold,
which is seen as a way to help the first time
buyer gain that all important first step on the
property ladder. The new threshold of £120,000
should be a help to most first time purchasers
with the average Scottish house price now at
£100,000. This eases the first timers’ problem
although it will benefit all purchasers, notably
the second home buyer. The rise in the Stamp
Duty threshold will help to offset the demise of
the 50% reduction in council tax bills formerly
enjoyed by second homes. 2005 sees the first
year of this reduction with most Councils now
allowing only a 10% discount. These changes will
not have a major effect in either of these
markets whilst interest rates remain low and the
plethora of buy to let mortgages are readily
available, which should at least offer some
comfort to purchasers.
The other main political topic is the Single
Survey Scheme. The multiple survey scenario at a
closing date where so many fees are wasted has
provoked much adverse comment from the public.
This in turn has prompted the Executive to run a
trial of the Scheme. The pilot was run on a
voluntary basis in a few selected
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areas of the country. The seller commissions a
survey on his property which is made available
to potential purchasers with the successful
purchaser refunding the fee to the seller. The
trial has resulted in a very poor take up with a
pitiful number of surveys. Despite this, the
Executive is now considering making the Scheme
compulsory. This is a lamentable state of
affairs as most purchasers prefer to commission
their own survey which is tailored to suit their
requirements. It is also debatable whether all
mortgage providers will accept the survey and
those sellers at the lower end of the market can
ill afford up-front fees without the benefit of
the sale proceeds.
This problem was exacerbated during a
particularly strong market with plenty of
competing purchasers for each property. The
answer is simply to accept offers subject to
survey providing this is carried out within a
reasonable period of time after the closing
date. A simple answer to a problem which
involves no interference from the Executive. In
England and Wales the situation is worse where
the seller will be obliged to provide a whole
host of additional information which involves
more time and expense.
And finally - the state of the market.
Notwithstanding the Election, the market is much
quieter with prices levelling. We are
forecasting a modest increase in prices over the
year with demand for rural properties remaining
strong especially those with a few acres of
land. Bell Ingram has a long established track
record in rural property and our Agency
Department is being expanded in Inverness and
Perth to meet this demand and provide an
increased level of service to our clients.
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