For some sectors, the festive break means a proper rest, unbroken, tools downed completely, and the house building sector tends to be one of those. That said, for many in that sector the lead up to the festivities is, well, frantic.
For those solicitors who act for house builders and developers with financial years which dovetail with the calendar year, the festivities are a chance to recover from that busiest of periods. The 6 weeks or so pre Christmas 2013 was one of the busiest in recent years for some of the bigger players in the house building sector, and as a consequence, for the Builders' team within MF.So was there anything of note emerging from all this activity?
Help to Buy (Scotland)
The big initiative in 2013 was of course Help to Buy (Scotland). Following its launch and roll out period, the first of those part government-funded completions involving the builders' team within MF were due to happen end of November through December.
Did Help to Buy deliver? Well, initial feedback from the Team here is yes, it did - for those cases that met the criteria and were approved. There seemed to be an underlying drive, no doubt a direct trickle down from political imperatives, to make it happen. And it did.
The outfit in our locale tasked with delivery - administering the Scottish Government's end of the equation - is Link Housing Association. The process should involve little, if any, liaison between the solicitors acting for the builder (namely the MF Team) and Link, but what we found was that there was in fact a fair amount of direct contact. This was either because the MF builder client sought assurance in individual cases that everything needed from their end to allow the customer to draw down government funding via Link was in place or because some buyers' solicitors were not quite familiar with the Link process and some cajoling or encouragement was helpful.
There was advance warning from Link of deadlines on buyers' solicitors for lodging a series of essential documents. If those weren't met in individual cases, draw down and completion pre Christmas simply could not happen, so from a customer satisfaction perspective that had to be tackled.
The impression we, at MF, gleaned from discussions with Link was favourable; they rather took the initiative. They gave the impression they were keen to maximise the number of completions nudged over the line in December, possibly for their own targets, and they went a bit above and beyond. They walked individual solicitors through the process, and left the door on those critical timelines open for as long as they could in cases where buyer's solicitors were struggling a bit. All in all, positive on that front, and may it continue.
Part Exchange deals
What about the other big feature of the new build market in recent times, namely the rise of part exchange? Does that continue to dominate the new-build market and are the part exchange resale policies of some of the bigger players having an effect on the second hand market itself?
Well, the perception was that part exchange volumes would taper as second hand markets improved - as new house buyers would be able to sell their own houses on perhaps better terms than they might be offered part exchanging. Certainly the forecasting from major national builders suggests exactly that, but that tends to disregard the very patchy nature of the limited market pick up north of the border and the fact that many new build developments surround sometimes stale second hand markets that show little, if any, sign of real improvement.
For those areas, probably too common in the Scottish Central belt, part exchange will probably remain the only ladder out of the slow sale or negative equity pit for some time to come. And when the builder resells the part exchange trade-in, is that further damaging the already stressed local market? Harder to call, this one. The builder clients will argue that the prices achieved are a reflection, rather than a driver, of local market conditions. Builders' briefs to estate agents tend to be for a reasonably quick turnaround for any part exchange on the back of realistic pricing - as their view is that they can't buck the prevailing conditions, and so there is little point in prolonged marketing or artificially high asking prices - and there may be something to that.
At this point, a surveyor's input is probably needed. Or are they still on holiday?