Scotland’s housing market is at last showing signs of recovery after years of struggling to shake off the impact of the credit crunch and economic meltdown, the boss of one of the country’s biggest builders says.
Mark Clare, chief executive at Barratt Developments, told the Press and Journal an easing of the mortgage market was encouraging many more people to visit new housing developments north of the border.
He was speaking during a visit to Scotland just weeks after Barratt, whose current developments in the north and north-east include sites in Aberdeen, Balmedie, Ellon, Kirkton of Skene, Marywell, Elgin and Inverness, announced a 73.7% surge in underlying pre-tax profits to £192.3million in the year to June 30.
The performance prompted the firm to announce its first shareholder dividend payment since 2008.
Mr Clare said the resurgence of the UK market generally could be seen at Barratt’s sites throughout Scotland.
Mr Clare said there was a lot of pent-up demand on both sides of the border, while initiatives to help people get on the property ladder were succeeding.
The Scottish Government launched its own shared-equity scheme – Help to Buy (Scotland) – on Friday, and Barratt’s boss said it should further help to stimulate a market that was already moving in the right direction.
He said the Aberdeen market continued to be very strong, while house prices across the UK were starting to rise again after years of stagnation or decline.
But he dismissed recent talk of a potential house price bubble as property values grow.
Mr Clare said: “As the economy recovers, we may start to see house prices increasing but we are a long, long way from a pricing bubble.”
Barratt sold about 1,000 new homes in Scotland last year and Mr Clare said the figure in 2013 was likely to be around 1,300.
Purchasers are in line for up to £80,000 of help through Scotland’s new Help to Buy scheme.
From today, both first-time buyers and existing homeowners buying a new-build house from a participating builder can get up to 20% of their purchase price.
The government then takes out an equity stake in the property, which the buyer has to repay at a later date.
Those buying properties valued at up to £400,000 can get help, but those who already own a house will be expected to sell it before they purchase a new home under the scheme.
It is expected buyers will need a deposit of 5% of the property price, and this and their mortgage must cover at least 80% of the cost of their new home.