The Press and Journal (Aberdeen and Aberdeenshire)
Getting to grips with year of change
Alan Cumming, national estate agency director with Aberdein Considine, outlines some of the many changes buyers and sellers can expect to experience
They say moving home is one of the most stressful things you can do – and then a global pandemic came along!
However, after 14 long weeks the property market is moving again and so far it has been business as usual, with a few small changes.
Lockdown and the shuddering halt it brought to the economy had an unprecedented impact on the property market in terms of transactions, but has done little to dampen demand.
So what’s changed since March?
TAX
As of yesterday the Scottish Government reduced the rates of the Land and Buildings Transaction Tax (LBTT).
The threshold at which LBTT begins to be paid has risen from £145,000 to £250,000.
That means those buying a home at under £250,000 will pay no tax, whereas previously someone buying a home at £225,000, for example, would pay £1,600 in tax.
The new rates will remain in place until March 31 next year.
VALUATIONS
Since lockdown we have been doing “virtual valuations”.
Using video call technology, sellers can walk our agents through their home so that we can accurately predict what your home is likely to achieve on the open market.
Estate agents can now visit in order to conduct valuations and take photos/videos. However, we and other agents are going to continue to offer and encourage virtual valuations in line with the government’s social distancing objectives.
VIEWINGS
A major shift in behaviour during lockdown has been the emergence of virtual viewings, which have really been embraced by househunters.
We have invested in the latest technology from the United States to create stunning virtual tours of the homes we sell.
Our Matterport cameras can scan every inch of a room in just a few seconds, creating a 3D simulation that you can walk through using your phone, tablet or computer.
These tours allow buyers to get a real feel for a property without physically entering it, helping sellers to minimise contact with other households.
With restrictions easing, you can now view homes again but, where possible, you should avoid touching surfaces, wash your hands regularly, and bring your own hand sanitiser.
The number of people on a viewing will be limited to those from your household that absolutely have to be there.
Personal protective equipment (PPE) will need to be worn during viewings, which will make them feel a little different. We’re also taking steps like opening all doors and cupboards to limit contact with hard surfaces.
MORTGAGES
Banks are still lending, but the deposit levels they are seeking has increased.
We have almost become used to 95% mortgages, and deposits of 5% have been the norm, particularly for first-time buyers, for a number of years.
However, as things stand today there is just one 95% mortgage available across the whole UK market. The Scottish Building Society is that sole player – and there is a catch.
Only qualified professionals can apply for this mortgage, who the lender specifies as doctors, dentists, accountants, solicitors, actuaries, optometrists, pharmacists and vets only.
Applicants need to be qualified, practising and registered with the appropriate governing body.
So, for all but professionals in these categories, a deposit of 10% or more is essential.
However, we still only have two lenders offering 90% mortgages – Scottish Building Society again and Bank of Ireland/Post Office.
There had been a third – Accord Mortgages – but it announced on July 6 that it would be withdrawing its 90% product for the time being.
Most mainstream lenders will lend 85%, which means a deposit of 15%. So, if buying at £200,000 you’d need to have £30,000 saved.
FIRST-TIME BUYERS
There is help out there for first-time buyers, however.
The Scottish Government recently announced a new multi-million-pound fund to help people buy a newbuild property.
An extra £55 million is being pumped into that scheme – called Help to Buy – extending it to March 2022.
And if it’s not a newbuild you are purchasing, or the value of the property is a little higher, there is the First Home Fund, where the Scottish Government lends you part of your deposit.
Buyers are still required to fund a minimum of 5% of the value of their new house from their own funds and loans can be up to £25,000.
This loan will be secured on the equity of the home; is repayable in full at any time; and must be repaid if the home is sold.
No monthly payments therefore apply.
These higher deposit requirements are the banks’ reaction to Covid-19 and are likely to be eased as a bit of normality is restored in the world.
CHANGING HABITS
If you are selling your home, you need to make sure you pick an agent that is strong digitally.
Do your research and check out their social media channels – if they are active online, they are going to have a better chance of finding you a buyer.
It is also a good idea to invest in a good virtual tour.
Since launching them last month, 70,000 people have opened our digital tours – and the first seller to use the technology received and accepted an offer for their two-bedroom within 48 hours.
In the meantime, I would urge people to come in to speak to us – as solicitors, mortgage advisers and estate agents, we’re well placed to help first-time buyers plot the best way forward.