Property prices in Caithness on average have not dropped significantly during the current recession, although there has been the occasional bargain to be found. This can generally be attributed to the fact that the prices were not over-valued to begin with, being around the same level as it would cost to construct a similar type of property.
In turn this price stability has led recently to interest from those who have previously had large investments in bank savings accounts or bonds in dipping their toes into the rental business. With bank investments giving such a small return at present, those with enough to buy a property without a mortgage are now being tempted to switch despite apprehension about the duties, risks and costs of being a landlord. This seems to have caused the most significant numbers of sales in the Caithness market at present: generally at the lower end of the market, 2-3 bedroom properties at up to around £70,000.
Likewise with the difficulties many people are facing in buying a property there appears to be a small but significant rise in those looking for private rentals, at least on a short term basis. Whether this demand will continue once the property market revives is an entirely different question.
On the other hand, with a few exceptions, properties at around £140 thousand upwards are having very little interest from prospective purchasers. This can be blamed squarely on the fact that few people in the county can find over £40 thousand for the 30% plus deposit now required with banks restricting mortgages to 70%. The Stamp Duty “holiday” for properties between £125,000 to £175,000 would save purchasers up to £1,750 - it’s the other £38 thousand causing the problems.
Locally it appears those who can raise these amounts are tending more towards buying building plots, then constructing a new house to their own specifications, using “stage payment” mortgages.Home Information Packs have now been compulsory for properties going onto the market for nearly a year now, but it is significant that probably the majority of properties currently on the market still pre-date this. There is little sign that HIPs are assisting purchasers in any way; on the other hand there are indications that numbers of people who might otherwise put their property on the market are not doing so due to the extra costs involved. The real impact will probably not be seen until the market starts to improve.
