Endrick Property: House talk

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House Talk

Scotland has an abundance of spectacular, rolling countryside and acre upon acre of beautiful, undeveloped land enveloping our main population centres. Many of our towns and cities of course can’t expand further due to restrictive planning regulations and green belt policies. Examine a map of the UK and we can see that less than 5% of land is built on – but without the necessary infrastructure of roads, schools and services the other 95% isn’t entirely suited for new homes.

Our building sector has been sorely hit by recession and while house building has currently been achieving good levels, the builders are still running behind the goals indicated by governments both in Scotland and the rest of the UK. Throw in shortages of joiners, plumbers, roofers and brickies and the industry starts to creak and struggle.

In other words it all adds up to a shortage of new homes and it’s a major worry to me as an experienced professional in the world of estate agency with a team whose fingers are on the pulse of trends on both sides of the border.

The government mandarins who craft housing policy in line with political will never use the word ‘homes’. For me, however, it is about home rather than house – whether it’s to buy or to rent. The need for new homes is here and it’s not reducing with any great speed. A crisis? You could certainly say that…

My colleague  – and incidentally my husband – David Mackie is President Elect of the 15,000 members strong National Association of Estate Agents so the homes issue is regularly on our agenda for discussion in our business and generally when we discuss market forces. The figures just don’t add up. In Scotland over the next five years it’s reckoned we’ll see 30,000 new homes being built. But demographic studies show that the actual need will outstrip that by more than three to one with 92,000 new households likely to be created. These figures alone reflect the serious nature of the shortage of new homes.

So where will these new householders actually find a roof? Inevitably they will look towards the second hand resale market focusing on the £60,000 to £140,000 price bracket and the private rented sector. That second hand resale market is still difficult for first-time buyers who, without substantial deposits, will often struggle to secure lending. Buy-to-let investors, many without the constraints or restraints of mortgage rules, are stepping in and scooping up. That all adds up to great business for professionals like us in the estate agency world but what about that first-time buyer?

Some, of course, will look towards the much lauded Help to Buy Scheme which has just been re-opened with a £195m investment earmarked for the next three years and available for first-time buyers who can drum up the much-needed deposit figure. We don’t live in an ideal world where couples stay together forever and recently I’ve met splitting couples who had turned to Help to Buy to secure that first-time home.  With a ‘For Sale’ sign outside reflecting the ending of their personal relationship they’re seeking advice on how best to move on their once-dream property.

The harsh reality for many is that in order to sell their ‘marital’ home and divide the spoils they face tough financial penalties and realise they also face stiff competition from the house builder who may still be selling similar properties at the same price they’d bought for 18 months to two years earlier. Suddenly to escape from the trap of the mortgage on their £130,000 home they could be facing losses of up to £8,000. At the same time as surrendering ownership, the couple splitting will either to revert to living with parents or indeed add another two to the list of housing need.  And so the problem grows.

Scotland’s latest wave of MSPs will soon start their parliamentary duties and, for me, new homes should be very high on the to-do list whoever wins the mandate. I hope those with the political responsibility deliver action and not just more words. The time is well overdue to signal more new homes.

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