REGENCY HOMES IS SURE IT’S NOT ALL DOOM AND GLOOM
Just how bad is the Scottish housing market and how is the global credit crunch affecting house sales? John Heath, managing director with Glasgow based housebuilder Regency Homes thinks the doom mongers are getting too many headlines, he says: “If we are to believe everything we read in the press about the fall-out from the credit crunch, the withdrawal of certain mortgage products and the apparent fall in house prices, we may as well shut up shop and go home.
“As is normally the case, it is never quite as bad as the ‘so called’ experts make out, doom mongers seem to monopolise newspaper column inches and broadcast sound bites. I can’t deny that the housing market has slowed down, but over recent years Scotland has seen a steady and continual increase in house prices, sometimes rapid, other times more slowly – but one thing I do know is that it rarely follows the trend set by the south of England, the source of much of the market commentary.
“The south of England property market is more volatile and susceptible to large fluctuations; the peaks and troughs in Scotland are much shallower, always have been.
“In Scotland, we have our own housing dynamic. The government wants us to build up to 35,000 new home per year, a target we are not currently meeting. This shortage of new homes alone helps to keep the housing market relatively buoyant.”
The withdrawal of certain mortgage products is linked to the credit crunch, but for the borrower with a deposit or equity in their current home, nothing much has changed. In simple terms, lenders offered too much to borrowers in high-risk categories and have now been left with huge debts. This has prompted the withdrawal of some mortgage products and, because of the way the media has covered this, the consumer thinks it is affecting ALL mortgage products.
Mortgage expert Kevin Hagerty insists that mortgage finance is still available. He says: ”Although the recent turmoil in the credit markets has had an impact on mortgage lending, this has been primarily in specialised, high risk areas of mortgage lending like Buy-To-Let, Self Certification of Income and Impaired Credit History.
“Some High Street lenders have reduced the number of products on offer but this in no way means that mortgage finance is unavailable. Mortgage loans of 90 per cent of the property value are still readily available to first and second time buyers.
“As long as a purchaser has sufficient income and a clean credit history then they should, under normal circumstances, have no problem securing a mortgage.”
John Heath concludes: “If you are thinking about moving home, now is as good a time as any. Once people with a deposit, or those who own a home with equity, realise that securing a mortgage is no more difficult than it has always been, we should start to see the confidence come back into the market – well in Scotland anyway.”