Monday, 15 September 2014

Scottish homes tottering?

There is quite a lot of talk among Scottish estate agents and surveyors, and among mortgage brokers, about the potentially serious impact of a Yes vote.

There would be uncertainty, of course, but there is also speculation that mortgage lenders would be reluctant to lend and that house prices could fall sharply.

The reasoning is that the the possibility of Scotland adopting its own currency would raise the spectre of customers earning their wages in that new currency -- which might fall in value -- but having to pay back their loans in sterling.

Their monthly payments could go up. Hence banks might shy away from offering new mortgages.

One broker suggested the consequence could be a 25% fall in house prices in Scotland.

However, a top manager in one of the lenders tells me that this scenario is most unlikely, at the moment.

His bank has no plans to restrict mortgage lending in the event of a Yes vote, partly because they don't see the currency problem as a serious issue yet.

The view is that an independent Scotland would choose to stick with the pound, even if the UK government refused to allow a full monetary union.

"We'll still lend," is the reassurance I heard, "and we'll see what happens."

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