A FLURRY of property statistics this week provide stark evidence of
the north-south divide -- a continuing downward slide in the South and
static prices in Scotland.
The Nationwide Building Society's monthly house price index shows a
fall of 2.7% across the UK in October compared with the previous month.
The Halifax Building Society's statistics for October showed a better
picture. Prices had dropped by 1.2% on their index and average prices
are 8.7% lower than 12 months ago.
Seasonally adjusted, the Halifax's index shows an average drop in
house values of 1% per month. Tim Melville-Ross, Nationwide's chief
executive, said that the end of the stamp duty holiday and interest rate
volatility over withdrawal from the ERM created ''uncertainty'' that
continued on into October.
''However, several positive features are now beginning to emerge for
the housing market,'' he said. ''For example, mortgage interest rates
are now at their lowest level for almost 15 years, houses are now on
average more affordable than at any time since 1971, and in many areas
of the country monthly mortgage payments are lower than rents.''
The average cost of a UK house is now #53,038 which is a drop of #1491
on September. House prices in October were 6.6% lower than in the same
month last year. Meanwhile, housing starts across the UK fell by 7% in
July-September compared with last year.
By contrast, Scotland has not been nearly as hard hit as the South.
But the Scottish property market is being held back by ''a resounding
lack of confidence'', say the Royal Institution of Chartered Surveyors
in Scotland (RICS).
The main problem facing the industry in Scotland is that prospective
buyers are worried about their job security. ''Even the recent interest
cuts do not appear to have spurred the public into thinking of moving
house,'' says the RICS quarterly market report.
Many parts of Scotland report static prices and properties are taking
longer to sell. ''Most people are choosing to play it cautiously by
selling an existing property before putting in an offer for a new one,''
says the report.
Surveyors in Scotland are reinforcing the regular refrain of this
column -- that properties have to be marketed at realistic prices to
achieve a sale. ''Property owners are urged to realise that a house is
foremost a place to live and only secondly does it have investment
potential,'' say the surveyors.
The good news is that Scotland does not appear to be suffering
mortgage repossessions at anything like the rate in England. The down
side is that no upturn in the Scottish market is predicted by the RICS
before spring 1993 at the earliest.
In compiling regional results, surveyors produced sample valuation
prices for starter homes (1-3 apartment flats) and urban family homes
(4-6 apartments).
* Glasgow and Strathclyde: Prices are mainly static, but small starter
flats are selling well. Robert Stein of surveyors Walker Fraser & Steele
said: ''The prevailing lack of confidence does not appear to have been
helped by interest rate cuts and will only be overcome when jobs are
felt to be secure.'' Starter homes, #37,500. Urban family homes,
#80,000.
* Edinburgh and the Lothians: The supply of properties for sale
exceeds demand and prices realised at the higher end of the market have
dropped. Duncan McDougall of Ryden Residential said: ''There's a general
lack of confidence, but if sellers were prepared to lower their
expectations more sales would take place.'' Starter homes, #34,000.
Urban family homes, #95,000.
* Dumfries and Galloway: Prices holding up ''reasonably well'' but
houses are taking longer to sell. Unusual rural properties, such as
those with fishings, continue to attract interest. Starter homes,
#31,000. Semi-detached family homes, #55,000.
* Inverness and Highland: The only active sector is the first-time
buyers' market. Purchasers are keen to sell before they buy. Prices are
stable. Starter homes, #33,000. Urban family homes, #66,000.
* Aberdeen: Lack of competition for houses is resulting in lower
prices. More properties are being offered at a fixed price. Local agents
believe that the Aberdeen market is still better than the rest of
Scotland. Starter homes, #35,000. Urban family homes, #85,000.
* Dundee and Tayside: Prices are static. Middle-range properties are
performing ''reasonably well''. Starter homes, #33,000. Urban family
homes, #70,000.
* Fife: Asking prices for houses over #100,000 are often reduced to
achieve a sale. More houses are coming on to the market, but there is a
lack of competition for them. Starter homes, #35,000. Urban family
homes, #65,000.
* Borders: Rural family homes are selling reasonably well, but large
former farm houses are proving hard to dispose of. Prices at the upper
end of the market have fallen back. Starter homes, #20,000. Family
homes, #70,000.
Woolwich urges tax breaks
IN a bid to get the market moving again the Woolwich Building Society
is proposing short-term tax breaks for people who move house. Chief
executive Donald Kirkham has suggested that the tax relief limit of
#30,000 should be doubled to #60,000 -- but only for people who move
house within a limited period of time.
He also recommends that the stamp duty threshold be doubled to
#60,000. The Woolwich has also launched a scheme to allow the 1.5
million people whose mortgage debt exceeds the value of their home
(known as negative equity) to move house.
The society will permit a buyer to transfer the existing mortgage,
including negative equity, from their current home into a new property
of the same, or less, value.
Home in the Highlands
AGENTS Savills are marketing Wester Lix (above and right), a property
which they describe as a ''Highland gentleman's home''. Situated near
Killin, Perthshire, Wester Lix might be of particular interest to any
gentle-folk called Macdonald: the property is currently owned by Ranald
Macdonald, the Captain of Clanranald.
He claims that the drawing room is big enough to accommodate two
sixteensome reels. The property comprises drawing room, dining room,
kitchen, study, WC, utility room, wine room, two bedrooms and bathroom.
It comes with an adjacent cottage which has large studio, dining room,
kitchen, four bedrooms, and two bathrooms.
There are about nine acres of ground with a lochan and waterfall.
Savills are seeking offers over #150,000.
* CALA Homes have opened their newest development, Stablewynd at
Alnwickhill, Edinburgh. The site used to be part of the Mortonhall
Estate and was used as grazing land until recently by Tower Farm riding
stable. (Picture above shows entrance.)
Cala will build 22 three, four and five-bedroom detached houses of 11
different designs at Stablewynd. Prices will start at #155,000.
* PERTH estate agents Bidwells are marketing an unusual opportunity to
rent a castle with strong historical connections. The first-floor flat
in Methven Castle (right) is available for an initial six-month lease at
a rent of #500 to #700 per month.
The property is available while its owners travel to Pakistan to carry
out voluntary work for the Scottish Churches World Exchange. Architect
Ken Murdoch paid #5000 for the castle as a ruin in 1984. He has since
turned the two-bedroom flat into a cosy well-equipped home. The ground
floor has been turned into a classical concert hall.
Methven Castle claims connections with the Wars of Independence when
Robert the Bruce confiscated the stronghold from Robert de Mowbray after
the English defeat at Bannockburn.
Over the centuries several kings and queens have lived in the castle.
James II and his queen took up residence around 1450, James IV was a
visitor in the late fifteenth century, and Queen Margaret died in the
castle in 1542.
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