2019 re-writes the property rulebook says Carl Warden
The Perth and Kinross property market enjoyed a record-breaking start to 2019 despite uncertainty over Brexit.
It was inevitable that the fall-out from the mini budget and its controversial tax cuts would manifest itself in the housing and mortgage markets because the cost and availability of credit is a significant driver of the market.
Therefore, it comes as no big surprise to see mortgage lenders suspend many rates and deals as they gather their breath before attempting to reprice the market.
It goes without saying that any big jump in the mortgage rate is a major concern for those who are buying houses at the moment. But, if you like the house, you can afford it and are confident you can continue to afford it, then there is no reason not to go ahead with your purchase.
What is fairly certain is that we can wave goodbye to the historically low interest rates that we have grown used to and brace ourselves for a return to the higher levels we last saw in 2012.
There’s also been much speculation that we could be facing a housing market crash. But while prices could fall over the longer term, there is no evidence that they will collapse like they did during the global financial crisis of 2007/8. The market in Scotland is still functioning well despite the uncertainty. I am seeing a small number of buyers pulling out of deals as we wait for this immediate uncertainty to pass, but I don’t see this continuing and especially so at the top end of the market.
From a Scottish perspective, it will be interesting to see if the Cabinet Secretary for Finance, Kate Forbes MSP, replicates Kwasi Kwarteng’s Stamp Duty cuts for the Land & Buildings Transaction Tax (LBTT) bands in Scotland.
On September 23, the UK Government announced a permanent cut to stamp duty in a bid to boost economic growth. The announcement means that in England no stamp duty will be paid on the first £250,000 of any property, up from £125,000 previously.
For first-time buyers in England the threshold is now £425,000, up from £300,000. The maximum value of a property on which first-time buyers’ relief can be claimed will also rise from £500,000 to £625,000.
While first-time buyers in Scotland do not pay LBTT on property purchases up to £175,000, a 2% LBTT rate is paid on property valued between £145,001 and £250,000.
It would be a big worry for the property sector should the Scottish Government not bring us more into line with the rest of the UK. A reduction in LBTT would go a long way to giving the Scottish housing market a boost, particularly for the lower bands, as we navigate this period of economic uncertainty.
Tel: 01738 621 121
About: Carl heads up the Residential Estate Agency division for the company and has a proven track record within the Scottish property sector. He has been marketing property in the Perth and Kinross area for over 35 years and has vast and detailed practical experience and knowledge of selling prime residential property: from period homes to contemporary developments. Carl is well known in the local area, having developed excellent relationships with buyers and sellers. His wider role involves looking after and supporting our Agency teams and colleagues in Oban, Beauly, Ayr and Forfar. Interests: Estate Agency, Market Valuation, Negotiation.