The Edinburgh and Lothians Property Group (ELPG), a group of five local estate agents, believes that the government needs to do more to reinvigorate
Scotland's property market.
Yesterday, the government froze Stamp Duty on properties up to £175,000. While ELPG member John Lints, from the Lints Partnership, sees this as "a much needed shot-in-the-arm for our property market" he says it did not go far enough.
"We would have preferred to see a total freeze on all levels of
Stamp Duty and this should be just the start of a long process by the
Government to help re-stimulate the Scottish property market," he said.
"At the moment, we have a situation where there are a lot of people out there who are either trying to sell or wanting to buy but are unfortunately being affected by the current position in the property market. Having these potential buyers and sellers means the foundations are there for the market to improve rapidly as long as the right policies are implemented that will help encourage growth."
After years of booming prices, property owners are seeing their home equity rapidly evaporating, although Edinburgh has been better shielded from the downturn.
Today, the Halifax said that its UK house price index recorded a 12.7% drop since August 2007, the first double digit drop of house prices since its records began. Figures, out yesterday from the ESPC, suggest that Edinburgh prices fell 6.5% since August 2007, the first year-on-year drop in house prices for decades.
Market boosters
Some commentators argue that the property market was so over-inflated that it should be allowed to correct to levels where first time buyers and buy-to-let investors are prepared to enter the market again.
The ELPG believes that the government should take a more stimulative approach. As well as lobbying for a stamp duty freeze across the board, the ELPG says the government should consider lifting the ban on holders of Self Invested Personal Pensions (SIPPs) being able to invest in residential property. Under current legislation, SIPP holders are only able to invest in commercial properties.
Steve Spence, ELPG member and senior partner of Neilsons added: "There is no shortage of people looking to sell their properties and make the next move but because everyone quite rightly is adopting a cautious approach they are putting their property on the market with a view to securing an offer before committing themselves on a purchase. This is what is creating the stagnation in the market place and the situation will only be relieved by purchasers coming in to the market whose offer is not predicated upon the sale of a property - stand alone purchasers."
"If the Government permitted SIPP investors to include residential properties in their portfolio the property market would receive a welcome injection of new funds from a totally new class of stand alone purchasers. There would be winners all round."
"Investors would be attracted to the scheme because of the tax breaks involved in including residential property in the SIPP; the Government would progress towards its long term aim of decreasing dependence on state pension arrangements; and most importantly new money would come into the market from people who do not have a property to sell."