Scotland’s decided. What now for the housing market?

We can stop holding our breath. It seems the Scots feel we’re not so bad together after all. 
Big change is coming though. More devolution of powers and greater control over their income and spending seem inevitable. Even the regions are talking of their desire for more autonomy.

So does the current state of Scotland’s housing market give us insight in to the source of Scottish grievances? What’s the situation right now and how might this morning’s decision impact both North and South of the border?

Yesterday’s figures from the Office of National statistics revealed interesting disparities in the national picture. The average UK price now stands at £272,000; an increase of 11% from £245,00. But look at the differences by country.
England. Up £255k to £284k (11.4%)
Scotland. Up £183k to £198k (8.2%)
Ireland. Up £160k to £171k (6.9%)
Wales. Up £132k to £139k (5.3%)

It’s clear that England is well out in front and continues to push ahead. Latest figures suggest    Scotland is enjoying some recent price rises but as you see, prices are still relatively low having not yet bounced back from the deep falls of 2007. The same is true of Wales and Ireland.

But should the English feel bad about languishing in wealth and prosperity while the rest suffer? Perhaps not, as many of them appear to be suffering quite badly themselves.
If we’re to assume that property prices are a reasonably reliable indicator of the financial well-being of a place, then spare a thought for Newcastle. It has been identified as the UK’s worst performing city for house price increases at 3% this year and an average price of £181k. A similar pattern is true of large swathes of the north of England. Not too terrible you might say but not good to have such disparity.

What a very long way from the booming south where the UK’s best performers – Cambridge, Oxford, St Albans, Brighton and yes, you guessed it, London are responsible for such distortion of the national picture. The average London is now reported to have risen by 19.1% this year to a staggering £519,000.

But it’s not just prices of course, it’s whether people can afford to buy. Here though, Scotland’s not fairing brilliantly either. It seems that they, like many other areas of the UK suffer from significant disparity between price and affordability.
In Midlothian, prices are over 8 times average earnings. In the apparently ‘booming’ oil town of Aberdeen prices are a staggering 10 times more. Compare that with 2003 where prices in both places were a much more affordable 4 to 5 times earnings.
Yes there are affordable areas, but would you want to live there and are they where the jobs are? Incidentally, Glasgow, where the ‘Yes’ campaign won a majority this morning, has an average property price of £126,000.

The accusation in Scotland, and now other parts of the Union, is that this southern England bias, aside from not being very fair, runs the risk of being somewhat de-stabilising. The call for an election over the matter suggests they might be right.

So, is it all bad for Scotland?

Quite probably not.
With the world’s spotlight firmly on them and talk of devolving more powers and money to Holyrood, this could be a major turning point for Scotland’s fortunes.

This morning, Lloyds and RBS have firmly backed Scotland again; committing to a ‘significant presence’ there from now on.
Availability of mortgages is no doubt set to increase, which is likely to give the market a further boost.
Prices have already made steady upward progress, especially in the middle of the market and it’s likely that wealthy buyers will soon return too, now that stability and certainty have returned.
The little rattle of confidence in the Scottish people to make ‘the right decision’ brought big promises from Westminster in the final days of the campaign and in that respect, the Scots can be pretty happy with what’s likely to be coming their way.

My tip –  get yourself up there and snap up a nice little crofters cottage while you can. If the world didn’t know about Scotland before, then they certainly do now!

It’s the likes of Newcastle we need to be worrying about. You’ve got to wonder who’s shouting for them?