Having been a domestic conveyancing solicitor for 35 years I have witnessed the booms and busts of the domestic property market throughout Scotland; the scramble for limited mortgage funds of the late 1970s to the over abundance of paper money in the 2000s; from mortgage interests rates of over 17% to today’s artificially low ones; from no separate charge to arrange mortgages to the grotesque mortgage arrangement fees endemic in the current system.
I have watched mortgage lenders remove decision- making from their local branch managers to the tick box culture of centralisation overwhelmingly based in the South and according to English and Welsh conveyancing practice despite Scotland’s unique and more robust property laws.
In 1997, I established Conveyancing Direct Ltd to provide sellers and purchasers of Scottish houses with an efficient, friendly and cost effective legal service anywhere in Scotland. Despite the worst that the Credit Crunch could throw at us we survived and are one of the largest conveyancing practices in the country.
House purchasers and sellers have much to gain from Scottish Independence
When asked, major UK mortgage lenders will confirm that the Scottish housing market is a lower risk to them than the English one. We have not suffered helter skelter price variations which is a cyclical feature of the Home Counties. Both the average amount and the percentage loan-to-value of Scottish mortgages are lower. Repossessions as a percentage of UK lenders’ mortgage books are lower in Scotland and the losses incurred proportionately smaller than what pertains in the South.
Having attended the Council of Mortgage Lenders’ Conferences in London their representatives never tire of telling Scots present that they know they are less exposed in the Scottish housing market and that our regulatory regimes for solicitors are more robust. Yet when they are challenged to reflect this in their lending criteria and lending terms their response is that as they operate on a UK level and there is no room for meaningful regional variations.
Scottish mortgage interest rates may even reduce after independence
For anyone to seriously suggest that lenders would seek to increase mortgage interest rates above those in the rUK when Scotland becomes independent flies in the face of the market which is both now risk averse and will compete for the low risk Scottish market. Enhanced Scottish Government support for those in mortgage arrears gives added comfort and confidence to mortgage lenders.
Apart from the benefits which Scotland’s low risk mortgage market has for lenders there are opportunitites for both lenders and borrowers alike once Scotland is Independent.
Streamlining of mortgage processing to meet the requirements of Scottish conveyancing practice as opposed to the comparatively pedestrian progress of an English and Welsh purchase is an obvious incentive for those competing for the Scottish market by establishing dedicated Scottish mortgage processing centres; our more coherent law enforcement agencies to tackle mortgage fraud and money laundering crimes working in consort with mortgage lenders, the Scottish Taxation Services, solicitors and our Land Register can exclude the fraudsters and their dirty money.
The idea of a mortgage free-for-all is a notion which has never sat easily with Scotland’s more conservative approach to home ownership. Mortgage lending is not just a right of mortgage lenders authorised to do so by the financial regulatory authorities; it is also a privilege. Lenders have a financial interest in mortgaged property, and within their lending rules borrowers are obliged to maintain their properties, yet lenders never take the responsibility for ensuring that their assets, the houses, are maintained to a reasonable standard. If they did, then early signs of financial distress among vulnerable borrowers could be addressed with the help of money advice and other agencies and reduce repossessions further.
Independent Housing Markets
My biggest fear if we remain part of the UK mortgage market comes from the rules and norms dictated by the City of London and its Westminster twin which create the huge disparity between the amounts borrowed in the South East of England as against similar properties in Scotland. The gulf is ever widening; the ubiquitous and unexceptional three bedroomed Victorian terraced house covering large parts of London is regularly commanding prices in excess of £800,000 as opposed to the self same house in Scotland achieving £150,000. Former council houses in the commuter land of St Albans attain £300,000 when similar houses sell for under £100,000 in Scotland.
These disparities are a huge disconnect which is unsustainable and injects significant risk into the housing market. London salaries as a rule are not 4 or 5 times what Scots earn to do the same job. What fuels that market is paper money which has no substance. The factors at play in London and the South East will have a day of reckoning which we in Scotland are unable to influence far less control if we are still tethered to the centralised UK government.
Independence provides the platform to protect the roof over our heads, which is essentially one of the basic needs of the people of Scotland.
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