Real Estate Expert says the influx of houses to the market is negatively impacting sales

Although it has taken a significant hit, the property market is still operating as of now, granted it remains in line with current government provisions. As such, the activities required to move house are permitted as well, so long as current safety guidance is followed as set forth by the Scottish government. Listed approved activities include those such as home appraisals, inspections, mortgage applications, viewing (barring open houses), offers, and home moves (including those across country borders).

The question remains, however: is the property market currently suitable for first-time homeowners?

The Head of Residential Property at Thorntons, Ken Thompson, has something to say about this. He believes it remains afloat and has created market conditions beneficial to sellers, but also cautions that first-time buyers are likely to pay inflated prices for quick-turnover properties, resulting in a loss of profit when they decide to sell.

In a recent public statement, Ken remarked: “We’ve witnessed an immediate and sustained mini-property boom since the market reopened in June 2020. There’s been such a pent-up demand fuelling the marketplace that in some areas has meant supply has struggled to meet demand.

“This has led to an increase in prices for all properties from small flats to top-end homes, which in some areas of Scotland, including Edinburgh and the Borders, have been significant. The year on year average price rise to the end of December was 6.8% in Dundee and Angus, 6.5% in Perth and 5.3% in Fife.

“Sales are only restricted by the number of homes coming to market but the demand from buyers has remained undiminished and first-time buyers have played a large part in driving the market.

“Part of this has been, in part, due to the availability of Government Assistance through the Help to Buy ISA scheme. This has now closed to new savers and has been replaced in part by the slightly less attractive Lifetime ISA scheme.

“The First Homes Fund, a shared equity scheme providing cash loans of up to £25,000 to assist in the purchase of a first home, has also proved hugely popular. This scheme was closed to applications in October but has now re-opened for applications to assist with purchases that will complete on or after 1st April 2021.

“Assistance may also still be available to new buyers under the LIFT Open Market Shared Equity Scheme. Funding is limited and is subject to maximum price thresholds that are fixed by reference to the number of rooms in the house being purchased, and the area within which it is being purchased – but it could provide a welcome boost.

“To gather more information on these schemes, and get assistance with applications, prospective buyers should speak to a Mortgage Adviser.”

“Another current incentive is the fact that Land & Buildings Transaction Tax (LBTT) is not payable where the purchase of a property is at a price of £250,000.00 or less. That currently leads to a saving for buyers of up to £2100.00 but that only applies to purchases that complete on or before 31st March 2021.”

Amidst these major concerns for first-time homeowners, the increasing prices stand at the forefront. These elevated prices could have dire consequences for home buyers as they cause required deposits to climb to unreasonable levels.

Ken later goes on to add: “There was a concern last year when some of the major mortgage lenders pulled their maximum lending back to 85% of the value of the property being purchased. Finding 15% of the value of the property plus the sum necessary to pay a premium overvaluation to secure a property means finding a significant sum.

“Fortunately, most lenders have reversed their policy and will now lend 90% – and in some cases more – plus mortgages are relatively cheap because interest rates are so low. Costs can be fixed by choosing fixed-rate products to protect against rising interest rates in the short to medium term.

“Ultimately, I believe there is never a bad time to get onto the property ladder but if there is a word of caution for first-time buyers, it is that that they do not pay an inflated price in a bullish market for a property that, as a first home, they may themselves be looking to sell again in three or four years’ time. But for sellers, this is a perfect time as you will be feeding demand.”

According to a newly published report, the NEC stands at the forefront of over 115 million transactions per year for a variety of different services, such as bus travel, community memberships, and electronic payments in school cafeterias. 

Managed by a little-known Dundee team, this national programme is used for an incredible amount of concessionary travel, with over 1.4 million people taking advantage of NEC benefits. In addition, of these 1.4 million, over 600,000 of them are young people who have been issued a Young Scot card. 

This card is proving to be an amazing time and money saver, gifting the holder with eligibility for things like discounts, reward points, and PASS (proof of age scheme).

This card also helps locally in Dundee, driving forward a well-thought-out digital strategy conceived by the council to benefit areas such as lifelong learning, young people, transport, health, culture, and finance. 

On Monday March 8th, the city council held a meeting regarding contracts for a new supply of  the Customer Management System and Card and Bureau Services for the NEC scheme, which was met with overwhelming approval by the council’s policy and resources committee.

The Council’s own John Alexander commented: “At a time when the use of contactless cards has soared because of the pandemic, this report illustrates how Dundee City Council innovation has helped to develop a key method to deliver public services for people.

“Uses of the NEC and its popularity have grown over the last 15 years and I am pleased our city and team have been at the centre of these developments.

“This is about how technology can be used to help in people’s lives, to make massive projects like concessionary travel easy to use and to deliver.

“It is a great tribute to the forward-looking attitudes in our council that we continue to manage this successful national programme.”

This National Entitlement Card will continue to be funded by the Scottish Government to support effortless, quality access to public services for the entire 32 local councils currently in place. Additionally, the funds for this card will be administered by the Improvement Service, who has confirmed an extension of the current service agreement they hold between themselves and the Dundee City Council. 

The younger generation is more inclined to invest in a post-COVID world according to new research.
According to the research results from OneFamily, a financial services provider, most young people especially between the ages of 18-30 are more inclined now to save more now than they would have one year ago. This survey showed that this was the opinion of 56% of people in that age bracket. In the face of the pandemic, more of these people have become more financially aware. Another percentage 38% according to the same research opined that they would be more inclined to put in money in financial assets like stocks and share-based investments.
This financial cautiousness of most young people stemmed from the realization that they were more likely to be laid off work, given a temporary leave of job or have had to look for a second job in the last twelve months compared to any other age-based demographic.
In the past year, young people below the age of 30 were able to add £1,480 to their savings on average. Not everyone in that age range saved as about 9% were shown to have not saved in the past year while about 13% were shown to have not saved up to £1,480.
The reason for the plan to save is centered around certain needs such as buying a home, saving for education and saving for a wedding. Where 13% are doing so for a home deposit, 11% are saving for a wedding and 16% have education as their reason.
“It’s been a tough time for all of us, so it’s understandable that the generation that’s been hit hardest is now more cautious about spending and are determined to build their savings”, opined Paul Bridgwater, head of investments, OneFamily
He goes further to say that taking precaution against future occurrences such as pandemic, recessions and employment is normal for the under 30 age bracket especially in the face of so much unpredictability.
People under the age of 30 have also prioritized the safety and future of the ecosystem and they show this by not using their money to fund companies that are doing damage to the environment. They make this stand even with the pressure building up.
According to Bridgewater, most young people became more inclined to save for a home after living with their parents or in a rented space that they could not make a permanent residence in the past 12 months. The consideration of using the 25% government bonus on a climate friendly Lifetime ISA might help to boost their savings pot whilst also appealing to their environmental ideals.
He goes further to say, “Meanwhile for those not looking to save specifically for property or retirement, a climate friendly stocks and shares ISA could help them to build their savings nest-egg at a time when interest rates are at a historically low level”