Opportunities in Scotland
Jonathan Sealey is chief executive of Hope Capital
It’s long been reported about the bias towards the South East; workers migrate there, jobs proliferate, while the house prices soar. There has been less attention paid to other parts of the UK which are also undergoing something of a boom. Take Scotland for example. Scotland has been in the news a lot over the past year but almost totally with regards to the political situation.
It could well be that it is this political situation that has had a positive effect on consumer confidence in Scotland, but there has been a definite knock on effect to the housing market. Demand for property is rising month on month and at Hope Capital we have seen a growing demand from brokers in Scotland who have clients wanting finance to develop or refurbish properties.
We have seen the same in England and Wales but there seems to be a scarcity of bridging lenders north of the border, which has driven us to start offering bridging loans there as of this month. Our launch has been purely down to demand; every month, people who we provide bridging loans for in England have been asking if we could also provide the same sort of deal in Scotland.
This growing demand is backed up by the figures: According to the latest Your Move/Acadata index, house prices in Scotland have risen by 11.2% in the last twelve months, double the 5.7% seen across England and Wales. While south of the border house transactions have been subdued this year, property transactions in Scotland were up 29% in March.
OK, the March figures were likely to have seen a boost ahead of the new Land and Buildings Transaction Tax, the equivalent of our stamp duty, which came into effect on 1st April and which charges a punitive 10% on every property above £325,000 and 12% on properties over £750,000 , but the trend is for a growing market.
Just how much this market is growing seems to have escaped the radar of many people. It could be that we have all been hesitant to go there until the election was out of the way, now that the economy and the business environment is becoming clearer a focus just on London and the South East could prove to be short sighted. It would be a foolish person who didn’t also look to the UK capital, but it is increasingly apparent that there are other areas of burgeoning growth.
Of course in Scotland there are the same challenges around bridging that there are everywhere else – with the biggest challenge being finding solicitors and valuers who truly understand the bridging market and the unique nature of a short term loan. There are also some very shrewd solicitors in Scotland however and enough people who operate across both sides of the border who can really add value to borrowers in Scotland.
While Scottish property law does have significant differences to property law in England and Wales, this is surmountable. Demand in the cities continues to grow and we for one are looking to Scotland as one of the significant growth areas of the next year.