The double-whammy of the impending HBOS redundancies and the credit crunch will do great damage to the Edinburgh residential market, according to David Alexander (pictured right) of the letting agents, DJ Alexander.
“In my 30-year career I’ve never seen like this. What was once a top class investment asset – residential property – is being hit very hard. Traditionally, residential would be affected in the mid-period of a downturn, but this time it has been hit right from the start. Historically, Edinburgh’s residential market has been robust during downturns. But not this time, prices are falling already…”
The situation is exacerbated by the fact that there is no apparent end point to the downturn. “Maybe we’ve reached the bottom with the crises in Lehman Brothers and HBOS, but I’m not convinced. HBOS has 17,000 staff in Scotland, but the people affected – and their mortgages – goes much wider than that.
Lloyds TSB staff will be worried about their jobs and their mortgages, then there’s all of the companies that service HBOS in one way or another. Make no mistake, the wider economy is going to be affected. Ironically, the rental market is thriving during this situation – I’ve never seen it so strong.”
And he predicts that it will get even stronger: “The banks will end up taking repossession of homes that people can no longer afford – then they’ll put them on the letting market.”
COMPROPSCOTLAND, 19 September 2008