10 Mar 2012

The Scottish Property Market

The Scottish Property Market

Harvey Aberdein, Partner, takes a look back at the year gone by and explores what next year might have in store.

Harvey Aberdein, Partner, takes a look back at the year gone by and explores what next year might have in store.

Business as usual?

Thankfully the RBS v Wilson debacle is now nothing more than a painful memory. The very last of our affected cases completed just before New Year.

Both the Scottish Government and our Law Society failed to rise to the challenges set by this strange Judgement and it really was a case of our Conveyancers having to find “belt and braces” solutions.

I am delighted to say that our legal guys and girls acquitted themselves marvellously well. A combination of charm and dark threats eventually persuaded all second Charge Holders to co-operate with us and supply Discharges so that our affected properties could be sold.

So...business as usual for repossession property sales in 2012? We sincerely hope so, but we are painfully aware that we are just one daft court case or Government “initiative” away from more chaos. Fingers crossed!

Older stock

Obviously “Wilson” greatly reduced volumes of new repossession properties coming onto the market last year. However as previously reported in August of last year, our Deputy Team Leader, Gillian Coutts took personal responsibility for our older properties (3 months +) and we believe this additional focus has reaped significant dividends.

We enter 2012 with our lowest ever stock of both 3 and 6 months plus properties and going forward, we intend to do everything in our power to move properties before they become “middle aged”.

New instructions in 2011

Numbers of new properties were a veritable roller coaster last year.

The reasons for this include:

1) court delays caused by the Home Owner and Debtor Protection (Scotland) Act 2010;

2) RBS v Wilson; and

3) the “Mackie Judgement” (the way Calling-up Notices are to be served)

January and February were very poor months for us, with only a trickle of Voluntaries coming on. Thereafter, there was a slow build up in numbers until we were hit by “Mackie”. November came nearest to achieving normal numbers.

Overall, repossessions were down almost exactly half on 2010 and down by two thirds on numbers we had anticipated. This made for a very difficult year for the department - forward planning all but impossible. However, we loaned out our team members to other departments and by in large have kept the team together and ready for the challenges of 2012.


Without wishing to sound complacent, our team did well in a very difficult year.

Our sales figures for all clients show that we achieved, on average, just above Home Report values and averaged 90.3 days market to sold.

Last Quarter 2011

The official figures from the Registers of Scotland for the last Quarter show an average year on year decline in value of 3.7% and in volume of 3.9%. As ever, care is needed in assessing such figures as they hide very significant regional and sectoral differences. For example, the North, North East and some parts of the South East performed reasonably well; whereas Central areas and west Central Belt, generally, struggled.

Also the figures for flats - a large proportion of our repossession portfolio - suffered proportionately greater falls of 5.8% value and 6.8% volume.

Affordability Index A recently published index provides interesting reading and reinforces our own views of the market. Bottom of the index (i.e. dearest average prices) feature such areas as:

  • Aberdeenshire (25.9%) 
  • Perth and Kinross (25.6%) 
  • Midlothian (23.2%) 

Top of the index (cheapest areas) include:

  • West Dunbartonshire (16.2%) 
  • North Ayrshire (16.2%) 
  • North Lanarkshire (17.2%) 

Sadly our Lender Clients will recognise these latter areas as holding significant proportions of our stock!

What to expect in 2012

Our Private Client Estate Agency Team is expecting a further decline in values this year of around 5%. This masks a steeper decline at the lower end of the market somewhat balanced by what is expected to be a reasonable market for upper middle and top end properties.

The repossession market may be influenced by the expected increase in volumes in late Winter/early Spring as the post “Wilson” and “Mackie” cases come onto the market. However, we expect a significant number of cases to remain tied up in Court for longer than we had anticipated, so the increase may not be as dramatic as we once feared.

As with the rest of the UK, the economic outlook for Scotland this year looks bleak so it will not be an easy market for repossession sales, particularly at the lower end.

The keys to successful selling remain -

  • best possible presentation 
  • competitive, appropriate pricing 
  • widest possible marketing 
  • best, appropriate local agent 
  • sympathetic, professional management 

We have the best Asset Management team north of the Border and the best agents panel; so we will be selling! 

Your properties are in good hands.

Harvey Aberdein, Managing Partner

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