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Foreign currency lending: Scotland

In Scotland where values are still 22% below their peak, the impending referendum in September is undoubtedly having an impact on the property market.

While the outcome is unlikely to affect dramatically the intentions of existing Scottish residence, the uncertainty has had an impact on the number of buyers moving from London who, until the summer, were keen to take advantage of the value gap.  We would expect a decisive ‘no’ vote majority, to boost activity and consumer confidence in the housing market. In the event of a decisive yes vote, we would expect the current uncertainty to continue, with a further delay in the recovery.

That was a survey carried out by Savills. As a lender, we have stopped lending on Scottish properties until the outcome of the vote, this is just because of the uncertainty of the value of Scottish properties, and the currency that we would be repaid in.

When I am talking to property developers in Scotland I feel their frustration that this referendum is having on their business, they will think it’s going to be a no vote and find it difficult to believe that the independence vote will go through, but as a lender we have to be cautious and the uncertainty around the future of Scotland is just made it impossible to lend there at this moment in time.

Looking at the report carried out by Savills, I hope there is a decisive no vote, and that will give a much needed boost to the Scottish property market. If in the event of a yes vote, it would seem that there will be a long drawn-out process until the currency and the markets settle down and  and then we should see  the property market recover. There is still a question of how a person from outside what would then be a new independent Scotland, would we be able to buy a property and also who the lenders would be, would the English banks still be allowed to mortgage properties in what would be a foreign country?

Richard Butler-Creagh


Richard Butler Creagh