Land acquisitions and constructions required to meet huge shortage of homes


Land acquisitions and constructions required to meet huge shortage of homes

25 Jan 2019

There is a continuous need to build 23,000 new homes in Scotland and the figure can be around 25,000 (extra new homes) to fulfill the backlog scarcity created by last year when only 18,000 homes were constructed. Academics at the University of Glasgow said builders need to acquire land before the construction starts as prior preparation are required for laying bricks and building homes. Builders can acquire land now, and the value of land will rise significantly in the coming years. They can profit from home building and also from the increase in the value of land. One can gain undeveloped agricultural lands to profit from future growth. Councils can help in promoting land development and acquisitions of unused farmlands or low-grade industry land.

 

Price Gain Continues

 

Currently, the price in Edinburgh continues to rise faster than in other areas of Scotland. The average selling price of homes in 2018 was 4.9 percent higher (to £242,000) in comparison to 2017. Fluctuations in the price with a slow increase in the last quarter, led to overall growth in price, while, the number of homes sold in 2018 was less as compared to 2017 by 3.4 percent as per ESPC data. The officials are expecting an increase in the number of properties in the year and a recovery from last year deficit, which can make it easy for the first time buyers to acquire properties in the coming years.

 

Edinburgh rates continue to Grow

 

A drop in the sale of the home was reported in Edinburgh in Q2 in 2018; even as the sale continues to grow. The highest growth in the sale was reported in the North East of Edinburgh.  The chief executives at ESPC said 2018 was a seller market and first time the market faced stiff competition as there was strong demand in the city for homes, while, a shortage in supply. Sale in the third quarter in Scotland increased 10 percent despite Brexit uncertainties, and the market remained strong in Aberdeenshire and Stirlingshire, where the sale grew 100 percent, and in Moray, the sales were up 55 percent and Perthshire 33 percent.

 

The markets in these regions did into growing at the time when other regions were growing. The buyers are not aiming to get immediate appreciation in rates but these regions are in high demand, principally, around Edinburgh, St Andrews, and Glasgow. In the medium term, buyers believe the house price will grow at the rate of 5 to 10 percent, and in the long term, the growth can be in the range of 15 to 20 percent. The region remained unaffected by economic uncertainties of 2008, and it attracts buyers due to relative affordability of the property, and attractive lifestyle. More than 50 percent of the home sale made in the last year was below the £145,000 threshold, the value from where the tax starts to apply. At least 8 percent of the properties are in the price range above £325,000, which accounts for 55 percent of the Land and Buildings Transaction Tax revenue. 

 

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