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Housing market in Argyll & Bute today….versus the past

We’ve written a number of blogs on house prices and the state of the property & housing market in Oban and Argyll & Bute, and for this blog I thought I’d concentrate on where the market is today in Argyll & Bute compared to the state of the market before and since the recession.

Despite some media comment stating the prices have now returned to pre-crash levels – which may be true in some regions of Scotland – the figures specifically for Argyll & Bute don’t reflect this. The peak average figure for Argyll & Bute occurred, as you might expect, just before the recession in Q3 2007 with a figure of £168,049. The most recent quarterly figure (Q1 2015) was over £10,000 less at £157,971. Or to compare like for like, the most recent quarter 3 (2014) had an average price of £150,087, some 10.7% below the peak. Although there have been a few isolated quarters that have shown average prices close to the peak, that hasn’t been representative of the wider picture and therefore it wouldn’t be correct to say that prices have completely returned to pre-recession levels in this area.
So you might be wondering about the value of your own property in today’s market versus when you bought, so we’ve put together a ‘ready-reckoner’ style chart based on Registers of Scotland’s Average Quarterly house price figures, but it might take a bit of explaining…

[link to chart]

What the chart shows is the percentage increase or decrease in the value of Argyll & Bute property value today (Q1 2015) against when it was bought (in isolation, and in absence of any other factors). For example, if you bought your property in November 2006 (Q4 2006), you’ll see that the figure for Q4 2006 is 12.2% which means that, in theory, the property is now worth 12.2% more than it was when it was bought.

If, however, you bought your property in November 2007, in theory your property will be worth 3.2% less today than when it was bought.

I say ‘in theory’, as in practice there is a myriad of factors that affect the value of any particular property, and therefore this should be used as a very rough guide only.

For any homeowners out there, the positive that can be taken from this is that, unless you bought in one of the 6 ‘red’ quarters on our chart, your property should now be worth more than you paid for it. Those who sold a property around quarter 3 2007 have probably played the property game best of all, although I use these terms very loosely as, as we covered in a previous blog (http://www.fiuran.co.uk/oban/house-home-asset/) a house is much, much more than an asset, and the property market is certainly not a game!!

Housing Market in Argyll & Bute – March 2015

In our last house prices blog we relayed that the Registers of Scotland were reporting that the rise in prices in Argyll and Bute were some of the highest in Scotland, and this was perhaps a contributing factor in that the volume of property sales in this region was relatively low in comparison to Scotland as a whole.

Well the figures for the subsequent quarter – October to December 2014 – are now in, and an interesting turnaroud can be seen. Certainly we at Fiuran have felt that it was an extremely busy quarter selling a large number of properties during this period, and this is backed up by the figures for the volume of sales in Argyll & Bute – which has the highest increase in Scotland – up by 15.9% versus the previous quarter and a substantial 18.2% higher than the same quarter last year.

Argyll & Bute is again bucking the national trend and is in the minority of Scottish regions to report an increase in average residential prices over the previous quarter, a 3.6% increase with the average price now at £155,557. Whilst this is a drop of 2.9% on the same quarter last year, it suggests prices are on an upward trend in this area.

"Buy cheap buy twice" "You get what you pay for" etc

“Buy cheap, buy twice” “You get what you pay for” etc etc.
We’ve all heard phrases such as these, and in many cases, it’s good advice. Tools are a good example of where this usually holds true, normally because more expensive tools are made with superior materials, with better manufacturing processes and produced to tighter tolerances – all of which combine to bode well for a lasting, quality product.

However, there are many instances in life where these phrases – often trotted out blindly – don’t stand up. For example, there are two German supermarket brands whose operations are defined on their good value and absence of unnecessary costs. By offering quality goods at reasonable prices, they have increased their market share significantly over the last decade, to the point where they are serious competitor in their field and one of them even being crowned the UK’s top supermarket chain in 2014! This is not something that can be achieved with sub-standard goods or services. And this is a very important point. It is prudent in every case to ask the question “where is the extra money going to, and is that going to benefit me, the customer?“ In many cases the extra money isn’t going into product or service itself, instead it goes to cover unnecessary overheads as a result of an non-lean operation.

Going back to the supermarkets example, the majority of the extra costs of the expensive products go into marketing and the brand name; the actual product – which is the bit the customer is interested in – is no better (no matter how much their clever advertising tries to convince the public otherwise!). And often the VFM supermarkets products are actually superior – “like brands, but cheaper” as the advertising campaign goes.

Reason for this blog? Well, if you’re reading this, hopefully you’ll be aware that we at Fiuran Property offer some of the lowest prices for estate agency in Oban & Argyll, and this is achieved by stripping back unnecessary expense which is of no benefit to the customer, whilst still providing everything you expect from a local agent (and more), specifically:

– Excellent local knowledge
– Professional, experienced staff
– Detailed property particulars including high quality photography
– 3d floorplans for every property
– 24 hours a day, 7 days a week availability
– Supervised viewings available
– A choice of fee options
– Personal service tailored to your needs
– Free advice on presenting and marketing a property for sale.
– Expert negotiating on your behalf

Further, our fees are not hidden from sight – a method often used so that the fees can be offered at whatever level the agent thinks the client can afford, or so that the fee can be offered at a level to simply undercut competition on the day.
Nor are our competitive fees just ‘for this month only’, i.e a quick deal to fill the books on an otherwise quiet month; we offer consistent good value – permanently.

All the best bits of a local agent but with the cost savings by being online. The best of both worlds! Give us a try – you won’t be disappointed.

A few words on the changes to taxation on property purchases

As you’ll probably be aware, a change to the way that property purchases are taxed has just been implemented (as of the 4th of December) which aims to address the ‘jump’ in taxation at the various price band thresholds. You can see the problem that the Government is attempting to address on their graph at this link which shows the volume (by price band) of residential sales in Scotland in 2013. You’ll note the large ‘spike’ in the number of transactions just below the £250,000 threshold and a corresponding ‘dip’ just after the threshold.
There is also a similar effect around the £125,000 threshold.

So, what are the changes, and how will they affect property purchases in Oban & Argyll?

The new system utilises different thresholds to those used previously, however more significantly, rates only apply to the part of the property price that falls within each band when it is bought, as opposed to the previous system whereby a fixed rate was paid for the entire transaction amount.

Specifically:
– No stamp duty will be payable on properties below £125,000, or on the first £125,000 of properties priced above this level
– 2% will be paid on the portion from £125,000 to £250,000
– 5% is paid on the portion £250,000 to £925,000
– 10% is paid on the portion £925,000 to £1,500,000
– 12% is paid on anything above £1,500,000
However, it’s worth noting that as of 1st April 2015, the Scottish Government are proposing to change the system again for purchases in Scotland only, with the introduction of the Land and Buildings Transaction Tax (Scotland), or LBTT for short. This change is similar to that recently introduced whereby varying rates of tax will be paid according to the amount of the purchase price that falls into each band, however the thresholds – and the rates applied to those bands – are quite different.

The figures that are proposed to apply in Scotland from the 1st of April 2015 are as follows:

– No stamp duty will be payable on properties below £135,000, or on the first £135,000 of properties above this level
– 2% will be paid on the portion from £135,000 to £250,000
– 10% is paid on the portion £250,000 to £1,000,000
– 12% is paid on anything above £1,000,000

Under Scotland’s LBTT, people buying houses priced below £324,280 will pay less than under the stamp duty system as it existed before 4 December. Those spending more than that will be worse off.

After 1st April those purchasing a £280,000 property in Scotland will be £1,300 worse off than someone purchasing an identically priced property in England. Someone purchasing a £360,000 property in Scotland will be over £5,000 worse off than their English counterpart, and the disparity widens as prices increase, with the difference in taxation being greater than £10,000 at the £460,000 property level.

We’ve put together a graph showing the past, present and (proposed) future which shows that effect at the various levels of house prices. It can be seen that those higher up will be worst hit when the change is introduced, and whilst some claim that this will be solely an inhibitor to purchases at the higher end of the market, some have further speculated that this will cause a ‘log-jam’, and the knock-on effect of a stagnating market at the upper end will cause problems at the lower end of the market potentially affecting first-time buyers.

As such, there is widespread call for the situation to be reviewed and to bring the rates in line with the rest of the UK. Whether this is will happen or not, it’s too early to tell. Watch this space…

Current Housing Market in Argyll & Bute

Whilst the media are very keen to fanfare the strength of the UK housing market – and we have unquestionably seen an improvement in market conditions over the last 18 months when compared with the prior 4 years – we feel that the local market is presently being tempered by two key factors.

The first factor affecting the Scottish Property market is the upcoming Referendum. Regardless of which side of the fence you are on, (or even if you’re presently on the fence!) such a major political and geographical decision is unsurprisingly causing some uncertainly, which in turn, is tempering the market. This is particularly notable on the mid to higher end of the market which is often reliant on, or at least benefits from, outside money, i.e. those who come into the area from elsewhere. This effect is also being seen on any property which benefits from any aspect of tourism, such as holiday lets, B&B’s and hotels.

The second factor that is having an effect on the UK property market as a whole, is the increased tightening of lending criteria imposed by the Banks and Building Societies. In response to accusations of irresponsible lending in the past, Banks and Building Societies are now including “stress checks” as part of the mortgage assessment and approval process. This is a method of assessing, not just whether the applicant can afford their mortgage payments as things stand currently, but also what ‘safety margin’ there is in the applicant’s financing and the applicant’s ability to meet with mortgage repayments in the face of interest rate increases. As a result of this, buyers are finding that finance is that bit harder to obtain, thereby diminishing the pool of available buyers.

Looking specifically at the Oban and Argyll & Bute property market, there are some interesting statistics in the latest residential property figures released by Registers of Scotland in the two key measures in house sales, these being the average sale price and the volume of sales. What is particularly interesting are the regional differences in these figures when comparing Argyll & Bute to the rest of Scotland:

Prices
On the positive side, the average (mean) residential property prices for Argyll & Bute show an annual increase of 13.6%, which makes it one of the strongest regions in Scotland in this regard – bettered only by Clackmannanshire, Renfrewshire and the Shetland Islands – whereas the majority of other Scottish regions are reporting more modest increases somewhere in the 0.5% – 7.5% bracket. Indeed, Argyll & Bute increases are almost two and a half times the Scottish average.

Volume of Sales
Conversely, or perhaps as a result of the above, Argyll & Bute saw an annual increase in volume of residential sales of just 13.6% whereas the majority of other regions were in the higher 21% plus bracket, and Scotland as a whole 22.4%, suggesting a slower market in Argyll & Bute in comparison to the wider Scotland.

It might be expected that a strong market would show strong numbers in both respects however, rising prices will also temper sales, and the larger increase in prices in Argyll & Bute versus other regions, may well help to explain the relatively slower market.

Whatever the reasons behind the figures, we will be watching the Registers of Scotland figures for the next quarter with great interest!!

House Price Comment

With the BBC reporting UK House prices are firmly on the rise, and the Express reporting that prices are rising at their fastest rate since 2007, it may be worth a brief pause to think about what this actually means in real terms.

On the face of it, house price increases are generally an indicator of a strong, stable or recovering economy, and that in itself is, of course, something to celebrate. However, whilst house prices have generally increased in the last 20 years, the Independent reports that the gap between house prices and salaries is widening and if house prices are increasing at a higher rate than salaries, property becomes generally less affordable. This is particularly pertinent for first time buyers who, with no previous house equity to help their cause, often really struggle. And with no first time buyers entering the bottom of the property ladder, those further up the ladder won’t be going anywhere fast either!

The other main concern with property prices rising too quickly is that this can cause a property bubble, and even the threat of a ‘boom-and-bust’ scenario is enough to have a cooling effect on the market. In some instances, this can become a self-fulfilling prophecy as those desperate to sell before a suspected crash, will reduce their house price to secure a quick sale, but in doing so, contribute to falling houseprices!

So how does this apply to Oban and Argyll? 

Well, in general, national circumstances seem to have a reduced effect on the Argyll property market, akin to dropping a stone in a pool of water where the ripples become less pronounced the further out you go. We saw this during the recent recession where, whilst the market certainly slowed in Argyll, prices did not appear to drop significantly (and certainly not to the magnitude of the 20%+ drop seen in some other areas of the UK).

Of course, all towns and cities have their own individual factors which will affect house prices regardless of what is happening at a national level, and we’re lucky here in that the many great accolades and attributes that make Oban and Argyll such a great place to live, helps ‘insulate’ us from the worst of the national effects. Titles such as ‘The Gateway to the Isles’ and ‘The Seafood Capital of Scotland’, in addition to Oban’s beautiful seaside location, contribute to a consistent and stable draw to the area which in turn supports a sustained demand for property here.

And so, whilst London is seeing a perhaps unsustainable 18.7% year-on-year increase, the office for national statistics are reporting Scotland’s increases at a more modest (and sustainable!) 4.8% – good news for us!

Our Website Designer

Since starting Fiuran Property we have had a great deal of positive feedback about our website, and whilst it is lovely for us to smile and graciously accept the kind words bestowed upon us, we really should mention the real unsung hero, Mr Rob Fenech (www.robfenech.co.uk), web designer and developer extraordinaire, who created our site for us.

We wanted to create a site that was new and fresh, but also one that was simple to use and clearly laid out, and we certainly feel that Rob has scored on all counts. That said, if there’s any feedback you would like to share with us on our site, we’d love to hear from you.

In addition to the fantastic design, Rob also used his web skills to ensure we are found easily on the web – something very important for an online Estate Agency – and we have achieved the ‘holy grail’ of being on page 1 of Google for all of the important search terms such as ‘Oban Estate Agents’, ‘Oban Property’, ‘Oban Houses’. So you can be assured that we, and therefore your property, are easily found on the internet.

So, a brief blog this time round, but we just wanted to say a public “thank you” to Rob – we’re so glad we found you.

What does ‘Fiuran’ mean??

A lot of people ask us what ‘Fiuran‘ means, so here goes…

Fiuran is a Scottish Gaelic word that basically means ‘a straight free-growing young tree’ or ‘a blooming or handsome youth’. Although we don’t speak much Gaelic, we still appreciate it as a beautiful language, and this simple word seemed to sum up where we were.

“Out of tiny acorns, mighty oaks grow.”

Modest beginnings, but with the right foundations, ingredients and substance to become something great. All companies – even the biggest you can think of – started somewhere, usually an individual, or a small group, with a great idea and the drive and belief to make it work.

We didn’t set out to be the biggest, only the best. We strive for 100% satisfaction and the feedback we have had suggests that we’re on the right track, with us recently receiving our first bit of repeat business.

However, although we have now perhaps grown past the point of being a ‘small sapling’, the company ethos is still resolutely there, and the satisfaction of our customers is and always will be at the core of what we do.

‘Help to Buy’… a bit of clarity!

Further to our previous post on the ‘Help to Buy’ scheme, we thought it might be worth putting a few words together about the schemes available in Scotland as ‘Help to Buy’  is getting a lot of media coverage lately, especially in the recent budget announcement. As is often the case, the majority of the media coverage has centred around the schemes available to those living in England, and the schemes relevant to Scotland are often merely given a cursory mention in a footnote, or the article simply states “p.s. does not apply in Scotland”.

So, in a bid to help clarify what IS available in Scotland, we’ve put together a brief summary (with a bit of help from the Scottish Government’s website), which is correct as of today. We’ve not gone into great detail on each scheme simply because the links themselves do.

Help to Buy (Scotland) Scheme
The Help to Buy (Scotland) scheme aims to help first-time buyers and existing homeowners to buy a new-build home in Scotland from a participating home builder, and is available on homes up to a value of £400,000. Full details can be found here.

Low Cost Initiative for First Time Buyers (LIFT) scheme
Three different LIFT shared equity schemes help first-time buyers on low to moderate incomes to own a home.

(1) The Open Market Shared Equity Scheme helps first-time buyers to buy a home on the open market.
(2) The New Supply Shared Equity Scheme helps first-time buyers to buy a new build home from a housing association.
(3) New Supply Shared Equity with Developer Scheme helps first-time buyers to buy a new-build home from a participating home builder.
Full details on the LIFT scheme can be found here.

Shared Ownership
Shared ownership helps a person buy a share of a home and pay an occupancy charge on the remainder to a housing association.  Shared Ownership is different from shared equity. Further details here.

The MI New home Scheme
The Scottish Government supports the private sector-led MI New Home scheme which allows lenders to offer mortgages to credit-worthy borrowers in Scotland who want to buy a new-build home from a participating housebuilder, with a maximum value of £250,000. The scheme supports both first-time buyers and existing homeowners. The scheme is anticipated to run until 31 March 2015.
More details here.

UK Government’s Help to Buy Mortgage Guarantee scheme
Finally there is the UK-wide Mortgage Guarantee scheme which is a UK Government initiative. Full details here.

We hope this information is helpful however, as a home is usually the biggest purchase anyone will make in their lives, we would always advise obtaining independent financial advice.

(Please note we cannot be responsible for the content or accessibility of any other websites or pages linking from our website).

The Price of a View

There are many factors that increase the value of a property, and a good vista is always high up on most peoples ‘wish lists’, which of course helps bolster the value of any property that is blessed with one.

But what is a good sea view worth?

A difficult question to answer, but Property Agents Knight Frank have given it a go. They compared the value of a property 5 miles inland, with its waterside ‘equivalent’ and assessed the difference in value.

As expected, the affect of a waterside view on the value of property varies across the nations in the UK, with the uplift in Scotland being 29%, 26% in Wales and England scoring a remarkable 66%.

The study also identified a notable difference between the different types of waterside view, with coastal surprisingly scoring at the bottom and an estuary view coming out on top, closely followed by a harbour view.

Estuary +82%
Harbour +81%
Riverside +53%
Coastal +47%

In reality, whilst interesting, this study is of limited use as the view offered by a property is only one of an almost infinite number of factors that will affect its value, and so placing an actual percentage value of a single aspect – such as a view – is somewhat moot.

So whilst you may not be blessed with a sea view in your own home, we are incredibly lucky here in Argyll that most homes in and around Oban have a waterside view within walking distance from their homes. We’ve picked a few of our favourite viewpoints in and around Oban, and best of all, we can all enjoy these free of charge!

Oban Bay

Oban Harbour view

Oban, Pulpit Rock

Soroba, Feochan Gardens 

Dunbeg, Camus Road 

Connel, Falls Viewpoint

Taynuilt, Brochroy

Benderloch

Barcaldine, Creagan Bridge

Kilmore