Archive for the ‘Aberdeen’ Category

Oil-price drop starts to bite in Aberdeen housing market

Sunday, July 5th, 2015

Aberdeen is facing a housing crisis as diving oil prices threaten to drag down the value of the city’s homes, many of which were bought with huge levels of debt in the belief that the hydrocarbon boom would continue unabated, according to an alarming new report.

The North Sea industry headquartered in the city has boomed in recent years as oil hovered around $100 a barrel. This contributed to a doubling of house prices there over the past decade, and buyers have been forced to stretch themselves further and further to get onto the property ladder.

But oil prices have dropped by 60 per cent to below $50 since July and are expected to remain around that level for some time, meaning the house-price boom is in danger of going into reverse.

“The oil-price crash could drag down the housing market in Aberdeen and a considerable number of people could suddenly find themselves in negative equity,” said Jeremy Willmont of the report’s author, accountancy firm Moore Stephens. “If the oil price is this low when interest rates eventually start to rise the outlook for the Aberdeen property market could get considerably worse.”

He added: “The oil-price fall has already had a negative impact on the employment prospects for some of those working in the oil industry. Second-line consequences for the housing market may now start to emerge.”

While disposable incomes in Aberdeen have risen faster than elsewhere in the UK over the past five years, thousands of jobs are expected to be lost in the area as North Sea fields become unprofitable to run at the reduced oil price. Companies such as BP have already announced hundreds of job losses, while many contractors in the industry have been forced to take a 15 per cent cut in their rates.

The possibility of repossession is high in Aberdeen because the city is so tied to the fortunes of a single, now struggling, industry. Furthermore, its homebuyers have taken on higher levels of debt than in any other Scottish city in the past decade.

The number of local people with mortgages that are characterised as “risky” by the Bank of England has risen by 42 per cent in the past four years, giving a total of 2,128 over the period. The figure compares badly with increases elsewhere, with a 10 per cent rise in Edinburgh and 2 per cent across Scotland according to data from Registers of Scotland.

A mortgage is said to be “risky” when homeowners borrow 4.5 times their salary and those that have been taken out recently are endangered by the threat of redundancy, falling house prices and rising interest rates.

Aberdeen’s housing market is also awash with highly leveraged mortgages where borrowing has not reached, but is close to, 4.5 times the borrower’s salary, as well as “risky” loans taken out before 2010, Moore Stephens contends.

The current situation is in contrast to last spring’s price surge, which contributed to a 9.8 per cent house-price increase in the first nine months of 2014. However, Aberdeen property prices suddenly slumped by 1.5 per cent in the final three months of the year, leaving the average price of a home in the Granite City at around £225,000.

Source: Independent Newspaper, Feb 2015.

Sell Your House Fast – even in a Recession

Monday, July 20th, 2009

5 Simple Things you can do to Sell Your House Fast

Its not impossible to sell your house in a recession.  Even in lower-demand areas such as Aberdeen there is potential for anyone looking to sell their house quickly to actually make it happen.  All you need to do is follow the following 5 easy things.


Fast House Sale Aberdeen

Wednesday, July 1st, 2009

House Sale Process Explained and How Aberdeen Homeowners Can Sell a House Fast

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