Scottish independence: Property market slump blamed on independence fear

WEALTHY buyers are turning their backs on investing millions of pounds in Scotland because of continuing uncertainty over the future of the property market caused by the SNP drive to independence.

New figures from property agents reveal that the number of estates sold in Scotland at a price above £2 million has slumped from 22 last year to just seven in 2012.

The figures, published by Savills, show that while £86m was spent by buyers on large country properties in 2011, the figure has dropped to £21m this year so far, with only the traditionally slowest months in the property market to come.

Sales of properties over £1m are also in decline, the figures show, with a fall from 64 in the first half of 2011 to 48 in the first six months of 2012. By contrast, the London market for luxury homes is booming with more than 100 sales of properties worth at least £5m in just one three-month period this year.

Jamie MacNab, a partner at Savills in Edinburgh, said: “It’s very difficult to sell a country house at the moment. The main thing is the economy but in certain circumstances it is the uncertainty about independence that is preventing buyers from England and overseas investing in Scottish property.

“It is the uncertainty that the vote is generating. Buyers are telling us this. They are waiting until the vote is out of the way to make their purchasing decisions. Buyers don’t know what will happen whichever party gets in.”

John Coleman, a partner at Smiths Gore, said: “There is no doubt that people are thinking very hard about investing their money in Scotland before we know what is going to happen in the independence vote.

“It is highly unlikely that Alex Salmond and the SNP will overtax inward investment but buyers are still concerned about the uncertainty. They are asking will it affect the value of the property they are planning to buy?

“If we do go independent will Scotland be seen as the safe haven in property as it is now? Overseas investors go to London first then they come up to Scotland, whether it is to buy a castle, to go sailing or for sport. They are prepared to spend money, even though they may only be here for four weeks a year. They are not going to do this if they think that the value of their property may half by 2014.

“They don’t want to spend £7.5m to find that it’s only worth £3m. They don’t know if Scotland is going to be in the European Union or what currency it will have.”

Coleman said that interest in one estate marketed by the company was much less than expected. “We have one estate on the market which is in great order. We have distributed 150 brochures but getting people to look at it has been very difficult.

“The uncertainty over independence has already scuppered the estates market and it’s now affecting bigger houses as well. Yet there is no problem in the London market; that is doing very well.

“We would be happier if there was some sort of manifesto for independence so that everyone knew what the way forward was going to be.”