There is no doubt in my mind as the leader of an exciting, ambitious and disruptive business that we have the appetite to grow quickly over the coming months. We are extending across the UK at a pace but wonder whether after the 18th September we will be trading internationally when we launch in Scotland. If the Scottish people decide to vote in favour of an independent Scotland how will that impact on the housing market? How might it impact on our decision to launch and when?
There are clearly strong views on both sides of the debate and I don't intend to express opinions either way although the outcome could have a bearing on the housing market in general. What might the impact be?
As the Scottish property market recovers from the economic downturn could the uncertainty have the potential to stall the market once again? Whilst the vote is on 18 September 2014, the Scottish Government has earmarked 24 March 2016 as the date that Scotland would become independent. During this 18 month period there will be doubt and debate about the economic future for Scotland and the UK and how they might settle some fundamental economic issues.
Whilst the political debate rumbles on about border controls and whether you will need to show your passport when entering the UK from Scotland and vice versa it is certainly the case that a yes vote would make us two nations with national borders. As a result any business trading from or with Scotland would be trading internationally.
Trading across borders therefore raises currency issues and although it has not yet been decided whether Scotland will retain sterling, adopt their own currency or even the Euro, every business will need to adopt a flexible model that can deal with this level of uncertainty. A number of other important wider issues have the potential to impact on the property market, such as the level of taxation in an independent Scotland, versus welfare spending, and also the level of fiscal freedom being granted by whoever determines Scottish monetary policy.
The residential property market plays an important role in the Scottish economy with around 84,000 properties sold each year, amounting to over £13 billion of transactions. There is a risk of higher lending rates in an independent Scotland and this could have a major impact on the property market.
Nearly 70% of residential transactions in Scotland every year are dependent on a mortgage and if it were perceived that as a smaller economy they presented a greater risk they may be given a lower credit rating than the rest of the UK. This could then drive up the cost of mortgage repayments putting upward pressure on household finances and potentially driving down the value of housing, as buyers seek affordability.
There is going to be a period of uncertainty in the months after the referendum should the Scottish people decide on independence. Uncertainty creates doubt and increases risk. There remain unanswered fundamental issues of currency, mortgage rates, property taxation and stability. These are the factors that buyers, sellers, entrepreneurs and business people will be considering when making future decisions. The sooner the answers to these questions emerge the better in my view.
Looking from the outside in and weighing up the resilience and determination of Scottish people it is certain that my business will be crossing borders into Scotland whether we remain national or as a result become international.