After the referendum in Scotland could fall sharply housing prices

House prices in Scotland have reached six-year highs, the monthly rise in prices by about 0.2%. This, of course, more modest numbers than shows UK property, and the more modest, London real estate or real estate in the South of England.

The level of property prices in Scotland still remains 0.6 % below its pre-crisis peak, and the number of transactions in the real estate market is 30% below its pre-crisis levels. But it averages.

 Those young families who first buy a house in Scotland, beat all records of activity . In Aberdeen and Edinburgh, the average price per unit of residential property reached £164483 in July, which is 5.7% higher than a year earlier. Of course, all this became possible thanks to the assistance programme of the government “Help to buy“.

The number of transactions in the market and first-time buyers in Scotland has reached 9285 in July 2014, which is 5 % higher than in June and is at its highest level since 2008. The prices of some residential properties in Edinburgh and Aberdeen 20%and 25%, higher than last year’s values.

The uncertainty of the market before the independence referendum, which is only one day, led to the fact that sellers are holding their properties, waiting for the results of the referendum. It is clear that in such circumstances, the market has a significant shortage of properties for sale. Presumably, after the referendum market activity will resume and the market will flood a large number of new properties that can stop the growth of prices, and in bad scenarios, even you may experience a sharp drop in prices in the short term.

 The recovery of the housing market in Scotland is very slow. Today the level of activity in the market – about 70% from their pre-crisis values. The ambiguity of the future of Scotland does not lend confidence to the market.

And after the vote there is hardly stability. In the case that the majority of Scots say independence is “Yes”, the country is waiting for 16 months of uncertainty, maybe this will be a transition period. In the case of separation there is even more uncertainty associated with national currencies, peculiarities of tax legislation, exchange rates , mortgage risk and other issues, the solution of which is expected to take about 16 months.

® Maxim Savitsky. 17.09.2014 g.

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