Wednesday 29 June 2016

Post EU referendum – will history repeat itself in the Falkirk property market?


A landlord of mine stopped me yesterday on the way back from getting my sandwich at Boots (no time for lunch out in these turbulent times!) and said ‘You’re an Economist, now that this Brexit stuff has quietened down a bit what should I do with my properties?’.

Now I am an Economist by training (and an Accountant for my sins!) so that part was true but I had to set him straight on the other part – things have not quietened down post Brexit yet ..... I wish!

However, what I have seen over the last few days is interesting as to me it follows trends of previous bad times which is actually comforting in a way as it gives us some indications as to what might, and I stress might, happen in the future.

Some shares have fallen off a cliff .... but not all


 Over the past week:
  • New house builder shares have fallen off a huge cliff.  Examples are that Crest Nicholson shares are down 40.0% over the last week and Berkeley shares are down 27.9%.  Trading was temporarily suspended in shares in many of the house builders including Berkeley Group, Crest Nicholson, Barratt Development and Taylor Wimpey on Monday as they went into freefall
  • Estate agents shares have fallen off a slightly smaller cliff.  Examples are that Foxtons’ shares are down 38.1% over the last week and LSL (Your Move etc) are down 26.0%.
  • Sales and lettings portals have fallen of an even smaller cliff – Rightmove is down 18.6% over the last week and Zoopla 23.3%.
  • Lettings businesses have hardly been hit at all – Belvoir is down just 2.1% over the last week – which is bucking the market trend as the FTSE 250 (a good barometer of the UK market as a whole) is down 8.7% over the last week.

These are similar trends to previous recessions where demand for house sales (new or second hand) have fallen sharply but, as a result, demand for rented properties has increased significantly.

Anicdotal evidence from house builders

I have a number of friends who hold senior mangement positions within house builders.  The mood music from them is two fold: firstly, that house builders themselves are effectively ‘pausing’ projects that have not started to see how things pan out over the next wee while and, secondly, that potential buyers are asking house builders for price reductions on properties for sale on existing sites.

Again, these are trends seen in previous recessions – pull up the draw bridge on new sites until things are more certain and actively try and sell stock on existing sites even if that means reducing prices.

Mortgage availability

The banks are going through the an even harder times than house builders.  There share price has absolutely tanked since the EU Referendum and shares in RBS and Barclays were also suspended on Monday as they went into freefall.  Now I am not saying that this is solely due to fears about the property sector (as they have other worries as well particularly the ability to trade in the EU after Britain leaves the EU) but fears about the property sector has impacted the banks’ share prices.

Given the uncertainty, experience from past recessions would suggest that mortgages availability may be reduced and mortgage criteria may be tightened thereby making it harder to get mortgage funding particularly on purchases with lower deposits.  In fact, I say the first example of this coming to pass yesterday when TSB tighted up its Buy to Let mortgage criteria.

Interest rates

This is a really interesting one.  Certain factors would suggest interest rates will go us eg Rating Agencies downgrading the UK’s credit rating, lower Sterling meaning higher prices which will create inflation which will need to be controlled.  However, other factors would suggest that interet rates will remain stable and would be reduced if they were not already at 0.5% which means that the Bank of England may need to ‘print money’ (Quantitive Easing) instead.

On balance, it is looking like interest rates are set to remain stable in the short term and there is a possibility of some printing of money. 

Lower growth or even recession

The turmoil caused by the EU Referendum vote in the UK and beyond will result in lower growth in the UK Economy or even recession.

Let’s keep perspective

Before the EU Referendum, George Osborne said that house prices may fall by 18%.  As I said in my blog on Monday, I think that house prices will fall but not by 18%.



To give this some context, the financial crash in 2007-08 did cause house prices to fall.  In Falkirk, the average house price fell from a peak of £116,349 in August 2007 to a low of £95,933 in March 2013 which is a fall of 17.5% and the financial crash of 2007-08 was huge, the biggest since the Great Depression of 1929. 

Pulling these factors together 

Based on the above trends, previous experience would suggest that we are likely to be entering a period of huge uncertainty with lower growth or even recession as well as tighter credit terms.  This will result in house prices falling as demand for houses is reduced but an increased demand for rented properties which provided people with much more flexibility.

In the last recession, the savvy (many said ‘brave’ at the time!), buy to let investors with cash or access to finance (which harder to come by) continued to buy properties as they could get them at competitive prices because demand for properties to buy was lower and they could rent them easily as demand for rented accommodation was high.  They then either sold the properties when the market picked up or held on to them as longer term buy to let investors.

Will history repeat itself in the Falkirk property market?


A few more interesting articles about the Falkirk property market:

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Tuesday 28 June 2016

Falkirk Maisonette Buy to Let Deal


Looking for an investment property to let out in Falkirk? Well this one is certainly one to consider…

It’s a spacious, well maintained two bedroom maisonette.  It’s in a quiet street in Bantaskine near both Bantaskine Primary School and Falkirk High School.  The photographs show it to be in good condition.

Double click here to see more details of this property

The property has been on the market since February 2015 and the price was dropped in early November 2015 to £59,950.  Given this, I would have thought that you could get the property for around £60,000 particularly in the current uncertain post Brexit climate.  I would expect this property to achieve rent of in the region of £450 pcm, so when we work out the annual yield you could be looking at a gross return of 9%.

This is a pretty good return for an investment property of this type in Falkirk so I suggest that if you are interested, you better give the estate agent a call… 


We hope you find our posts useful.  If you would like some advice with your potential investment, please come and see us in my office (6 Vicar Street, Falkirk), call me (01324 459840) or email either of me (falkirk@thekeyplace.co.uk).
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Monday 27 June 2016

Scotland votes remain, UK votes leave – what now for the 41,307 Falkirk landlords and homeowners?


It is interesting times at the moment for the Falkirk property market. 

As we all know by now, the United Kingdom & Northern Ireland overall voted narrowly to leave the EU but Falkirk in particular and Scotland in general voted overwhelmingly to remain in the UK and, as a result, the Scottish Government is talking about Scotland remaining in the EU via Indy Ref 2.


What next for the 41,307 Falkirk homeowners especially the 21,898 of those Falkirk homeowners with a mortgage?

There are two layers to this

The first layer is – What next for Falkirk homeowners if Scotland stays with the rest of the United Kingdom and leaves the EU?  With the second layer being – What next for Falkirk homeowners if Scotland stays in the EU and separates from the rest of the United Kingdom?

Taking the first layer first ...... Scotland leave the EU along with the rest of the United Kingdom

The Chancellor in the EU referendum campaign suggested property prices would drop by 18%. Using Treasury estimates, their method of calculating this was tenuous at best, but focused around the abrupt and hasty increase in UK interest rates, which in turn would raise the cost of mortgages, and therefore lower demand for property, causing a drop in property prices.

Falkirk property values

I agree that Falkirk property values will probably drop in the coming 12 to 18 months – but by 18% – I am sorry I find that a little pessimistic and believe that figure was rhetoric to get homeowners and landlords to vote in a particular way.  But the UK property market is quite a monster.

Since the last In/Out EU Referendum in June 1975,
property values in Falkirk have risen by 1894.7%

(That isn’t a typo) and whilst property prices did drop nationally by 18.7% between the peak of 2007 and bottom of the market in 2009, when one compares property values today in the country, compared to that all-time high of 2007 (the period before the financial crisis of the Credit Crunch of 2008/9) .... they are still up 10.14% higher.

Another Credit Crunch?

And so, notwithstanding the Credit Crunch, the worst global economic outlook since the 1930s and the recession it brought us, a matter of a few years later, the Government was panicking in 2012/3/4 that the housing market was a runaway train.

Now the same Credit Crunch doom-mongers and Sooth-Sayers that predicted soup kitchens in 2008/9 are predicting Brexit meltdown. Bad news sells newspapers. Stock markets may rise, stock markets may fall, yet the British public continued to buy property in 2009/10 and beyond. Aspiring first time buyers and buy to let landlords dusted themselves down, took a deep breath and carried on buying .… because us Brit’s love our Bricks and Mortar .... we need a roof over our head.

However, as mentioned previously, if the value of the pound drops, in the past UK Interest Rates have risen to reverse that drop. However, whilst a cheaper pound will make your pint of Sangria a little more expensive on your Spanish holiday this year and make your brand new BMW pricier .... it will make British export cheaper!  Which is great for the economy.

Interest rates

… and what of interest rates? Since 2009, interest rates have been at 0.5% and lots of people have become accustomed to those sorts of levels. So what if interest rates rise .... end of the world? Interest rates in the 1986/88 property boom were on average 9.25%, in the 1990’s they were on average around 6.5% and uber-boom years (when UK property values were rising by 20% a year for three or four straight years across the UK) .... 4.5%. Many of you reading this who are in their 50’s and older will remember interest rates at 15%.

But I suspect interest rates won’t rise that much anyway, as Mark Carney (Chief of the Bank Of England) knows, raising interest rates causes deflation – which is the last thing the British economy needs at the moment. In fact they have been printing money (aka Quantitative Easing) for the last few years (which causes inflation) to the tune of £375bn a month and there is fresh talk of doing this again now. A bit of inflation because the pound has slipped on the money markets (not too much mind you) might be a good thing?

.... because whilst property values might drop in the country, they will bounce back. It’s only a paper loss .... because it only becomes real if you sell. And if you have to sell, again as most people move up market when they sell, whilst your property might have dropped by 5% or 10%, the one you want to buy would have dropped by the same 5% to 10% .... and here is the best part – (and work your sums out) you would actually be better off because the more expensive property you would be purchasing would have come down in value (in actual pound notes) than the one you are selling.

The Falkirk landlords of the 4,124 Falkrik buy to let properties have nothing to fear neither, nor do the 9,073 tenants living in their properties.

Buy to let is a long term investment. I think there might even be some buy to let bargains in the coming months as some people, irrespective of evidence, panic.  Even if we pull up the drawbridge and immigration stopped today, the British population will still increase at a rate that will exceed the current property building level. Britain is building 139,600 properties a year, but needs according to the eminent ‘Barker Review of Housing Supply Report’, the country needs to build about 250,000 properties a year to even stand still, and as the birth rate is increasing, the population is living longer and just under a quarter of all UK households now are occupied by a single person demand is only going up whilst supply is stifled. Greater demand than supply equals higher prices. That is definitely a fact.

Turning to the second layer first ...... Scotland stays in the EU and deparates from the rest of the United Kingdom

The first things to say about this is that there is even more uncertainty about this as the Scottish Government would need to ‘do a deal’ with the EU and the rest of the United Kingdoom and the Scottish people would need to agree to it through a referendum.

Therefore, in the short term the likelihood it that Falkirk homeowners will be impacted as if we were leaving the EU ie the first layer as discussed above.

However, if Scotland stays in the EU and departs from the rest of the United Kingdom then the fundementals that existed in the Scottish economy before the vote on Thursday may come to the fore again.  You may have forgotten what was happening before Thursday’s vote (I can’t believe I am saying that but it has been an temultous few days!) but the fairly strong economy, the increasing population, the desire for more people to live alone or in smaller numbers and the lack of house building were all pushing up house prices and rents.

So, what will happen next?

Well, there are many challenges ahead. The country has spoken and we are now in unchartered territory – but we have been through a couple of World Wars, an Oil Crisis, Black Monday, Black Wednesday, 15% interest rates and a Credit Crunch … and we survived!

And the value of your Falkirk property? It might have a short term wobble… but in the long term – it’s safe as houses regardless.


 A few more interesting articles about the Falkirk property market:

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Friday 24 June 2016

Vote Leave wins .... what should a Falkirk property market investor do?

So we now know the result of the EU Referendum,  It was a long, indeed a very long, Referendum campaign that seems to have been more focused on shoutings and fairly nasty so called debates rather than sensible arguments and discussions but we now have a result.

Falkirk voted to Remain in the EU by 57% to 43%, Scotland voted to Remain in the EU by 62% to 32% but the UK voted to Leave the EU by 52% to 48% thanks largely to voters in England and Wales who voted strongly to Leave. 

So what does this mean for investors in the Falkirk property market.

Simply put, it is not time to do anything dramatic but rather it time to pause for reflection.


 Falkirk property in itself is not that affected by whether we are in the EU or not as most of the property laws as well many of the financial aspects of property, like mortgage rules and regulation, are set in Scotland or the UK.  However, Falkirk property is affected by the state of the UK and Scottish economies. 

The vote to Leave is will create short term uncertainty in the financial markets as well as in the political corridors of power which will have a short term negative impact on the UK and Scottish economies which will in turn have a short term negative impact on the Falkirk property market. 

On top of this, given that Scotland voted strongly for Remain in the EU but is being forced to Leave the EU by its English and Welsh cousins there is the possibility of Indy Ref 2 which will create more uncertainty.

So why do I not take action immediately I hear you say?

The simple answer is that property is a long term investment and a wee bit of patience is needed to see what the medium to longer term prospects will be for Scotland, for the Scottish economy in general and for the Falkirk property market in particular as the UK prepares to Leave the EU. 

After this pause for reflection, be ready to take strong, bold and decisive action as there will be opportunities in the Falkirk property market as a result of the UK voting to Leave the EU for the savvy and the brave .... change always creates opportunities for the savvy and th brave!

So, sit tight for a while to see how the land lies in the new brave new world, take on board advice from credible sources including the Falkirk Property Blog and then decide what to do with in the Falkirk property market. 

The Falkirk Property Blog ...... we have our finger on the Falkirk property pulse!

If you would like any advice on the Falkirk property market after the EU Referendum, feel free to pop into my office at 6 Vicar Street, Falkirk, FK1 1LN, for a chat, give me a call on 01324 469840 or email me on falkirk@thekeyplace.co.uk.


A few more interesting articles about the Falkirk property market:
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Thursday 23 June 2016

Referendum result impact on the Falkirk property market – watch this space


As we all know, today is polling day for the EU Referendum.  The wording on the ballot paper is in the picture above.

The result of the EU Referendum will be known by tomorrow morning and the Falkirk Property Blog will be commenting on the impact of this result on the Falkirk property market first thing tomorrow morning.

Watch this space for specific commentery on the EU Referendum result on the Falkirk property market.

The Falkirk Property Blog ...... we have our finger on the Falkirk property pulse!


A few more interesting articles about the Falkirk property market:

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Wednesday 22 June 2016

Values of Falkirk Terraced Houses smash through the £125/sq ft barrier


As I mentioned in one of my blogs last week, I was having a cup of tea at Tea Jennys in Falkirk last week with a landlord.  This landlord already has a couple of residential properties as well as a commercial unit that are doing very well for him and is on the look out for a third residential property.  When we were talking, he asked me a question that made complete sense in terms of commercial property but was as bit ‘left field’ from a residential property point of view – how much he should be paying per square foot?

Well, that was a challenge and you know how I like a challenge!

So I did my research and found out that:
  • The average flat in Falkirk is currently selling for approximately £142 per square foot costing, on average, £84,306.
  • Terraced houses in the town are currently selling for, on average, £97,368 or £126 per square foot.
  • An average semi in Falkirk is obtaining for £132,138 and achieving £160 per square foot.
  • Finally, the average detached house in Falkirk is achieving £146 per square foot and is selling for £229,765 although this selling price is skewed by a small number of high value properties that do not make viable buy to let properties.

Now these are of course averages, but it gives you a good place to start from.


If you recall in an earlier article, my research reveals that Falkirk terraced houses tend to generate a better yield than detached and semi-detached houses (probably because they are cheaper to buy than semi-detached houses but rents as fairly similar) and flats (probably because there are not that many flats for rent in Falkirk). However, detached houses, semi-detached houses and flats tend to appreciate in value more rapidly and may well be easier to sell – remember 22.0% of properties in Falkirk are terraced houses compared to a national average of 18.6%.

So, terraced houses are the cheapest to buy per sq ft and give the highest rental yield but give the lowest capital growth.  That’s interesting.

If you would like to explore how we can help you with your property investments, or should you require any advice about investing in the Falkirk property market, wish to enquire about our Investment Analysis Reports, Property Sourcing, Residential Lettings or Property Management services, please do not hesitate to visit the Falkirk property Blog (www.thefalkirkpropertyblog.co.uk), contact me for a chat (phone me on 01324 469480), come and see me in our offices (6 Vicar Street, Falkirk) or email me (falkirk@thekeyplace.co.uk).



A few more interesting articles about the Falkirk Property Market:
  • Win win for Falkirk landlords – capital growth AND rental yields are higher than in Linlithgow and Edinburgh! http://bit.ly/1VZaON2

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Friday 17 June 2016

Snap up this ‘new on the market’ modern Falkirk flat


What a week!  Terribly busy with landlords asking for my help with their buy to let opportunities so I will keep this blog post short.  Don’t get me wrong, I love being busy .... bring it on!

Today’s buy to let opportunity is a modern first floor 2 bed flat in the Canavan Park development at Bankside off Grahams Road. It is just on the market today
The flat has a decent sized lounge, a modern fitted kitchen, 2 bedrooms and a modern bathroom.  The property is in lettable condition. 

Double click here to get more details on this property

Doing the maths. The property is on the market with Clyde Properties for offers over £77,000 so let’s say it goes for £85,000.  Rent of £450 pcm to 475 pcm is achievable on a property like this so that gives you a yield of 6.3% to 6.7% which is reasonable given the modern, low maintenance nature of the flat

We hope you find our posts useful.  If you would like some advice with your potential investment, please come and see us in our offices (6 Vicar Street, Falkirk), call us (01324 469840) or email either of us (falkirk@thekeyplace.co.uk).


For other Falkirk buy to let opportunities see www.thefalkirkpropertyblog.co.uk.  A few examples are below:

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Wednesday 15 June 2016

Win win for Falkirk landlords – capital growth AND rental yields are higher than in Linlithgow and Edinburgh!


In Falkirk, I am speaking to more and more landlords, be they seasoned professional landlords or FTL’s (first time landlords), as they read The Falkirk Property Blog that shows that the Falkirk rental market is doing reasonably well, with rents and property values rising. 

When I was having a chat with one of these landlords over a cup of tea in Tea Jennys the other day, he asked me two completely unrelated questions that got me thinking.  The questions were, how much faster are Linlithgow and Edinburgh property prices rising than Falkirk ones and how much he should be paying per square foot?

Interestingly, we both thought that obviously Linlithgow and Edinburgh property prices would be rising faster than Falkirk property prices but, going by my mantra of ‘never assume nuthing’, I did my research and was astounded by what I found.

Over the last twenty years, property values in Falkirk have risen by 266.67%, compared to Edinburgh’s 258.42% and 259.17% in Linlithgow.


This is an astounding result as it turns the historical view of the capital growth vs income see saw on its head.  The capital growth vs income see saw says that the higher the capital growth the lower the rental yield and vice versa.  

However, the property values research I did means that not only has capital growth been greater in Falkirk than in Edinburgh and Linlithgow, but your investment money also goes further in Falkirk as properties are cheaper meaning there will be higher a rental yield – in Falkirk you can get easily 6-8% whereas in Edinburgh you are lucky if you get 4-5% per year and Linlithgow is somewhere in between.

So looks like ‘you can have your cake and eat it’!

What about the ‘how much he should be paying per square foot’ question I hear you say?  Well, that’s a topic for a future blog post .... watch this space.

Whether you are a landlord, a ‘Homes Under the Hammer’ addict or just a homeowner who is interested in what is happening to the local property market, then please visit The Falkirk Property Blog (www.thefalkirkpropertyblog.co.uk), contact me for a chat (phone on 01324 469840), come and see me in my office (6 Vicar Street, Falkirk) or email me (falkirk@thekeyplace.co.uk).


A few more interesting articles about the Falkirk Property Market:

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