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Comment: Post referendum bounce ‘on the way’



Estate agents anticipate a flurry of activity. Picture: Scott Louden
Estate agents anticipate a flurry of activity. Picture: Scott Louden


FINANCIAL plans left on ice amid the uncertainty of the referendum will be back on the agenda this week, with experts predicting a bounce in Scotland’s housing market as a result.

Many Scots fearful of post-independence turmoil that could leave their plans in tatters have been deferring their big financial decisions over recent months, financial advisers report.

They included house purchases, which means that estate agents now anticipate a flurry of activity as more buyers and sellers enter the housing market.

But it was currency that was the biggest issue for those who put their plans on ice as the independence debate heated up. Savings, investments and pension funding decisions were also deferred, while some even delayed their retirement in fear of changes to pension rules north of the Border.

“A number of our clients were naturally worried about a possible Yes vote, and this revolved around their savings and investments,” said Tom Munro, director of Tom Munro Financial Solutions in Larbert.

“The biggest issue for most was what future currency their money would be denominated in and the probability of future exchange rates impacting on any maturity values. Many investors deferred further investment until the vote was cast.”

There were also concerns that Scotland-based savings and investment groups would respond to a Yes vote by moving south of the Border.

“This raised fears of increased administration costs across the board, which ultimately increases the drag on investment returns,” said Munro.

“However, now the picture is more clear, those individuals who feared change would impact on their long-term lifestyle objectives will be advised to go ahead with their plans.”

The most immediate effect is likely to be seen in the housing market.

Experts predict a short-term bounce in the property market as buyers and sellers that had been sitting on the sidelines pending the outcome of the vote now prepare to make their move.

“There is absolutely no doubt that the uncertainty has put many business decisions on hold and this has filtered down to the housing market,” said David Alexander, managing director of estate agent DJ Alexander.

“With a result which will generally be seen as being welcomed by business, it is to be hoped that renewed confidence will ripple across the entire housing market.”

But as more homes come on the market, and increased competition among lenders drives mortgage costs down, estate agents expect a busy end to the year.

Robert Carroll, managing director of Edinburgh-based solicitor and estate agent MOV8 Real Estate, said: “Whilst there was no guarantee that a Yes vote would have had any negative effect on the property market north of the Border, it would have taken quite a few people by surprise given that the opinion polls had consistently put the Better Together campaign ahead throughout the campaign.

“This would have probably had a slightly unsettling effect on all markets, including the property market, at least in the short term.”

The coming weeks will see a surge in the Scottish housing market as buyers and sellers regain the confidence to make decisions, he predicted.

“There is no doubt that some people were waiting for the result of the referendum before deciding to buy or sell. I would therefore anticipate a ‘bounce’ in property prices and activity levels as a result of certainty returning to all markets, including the housing market.”

He expects an “unusually busy period” in the Scottish property market over the remainder of the year as more new homes go on the market.

Andrew Rettie, head of agency for Strutt & Parker in Scotland, echoed Carroll’s forecast.

“We believe the No vote will inject confidence, optimism and stability into the market and that we will see a renewed vigour in the latter months of 2014. Buyers and sellers who have stalled in recent months while waiting to see how the referendum plays out can now move forward with relative certainty about what lies ahead.”


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