Edinburgh - The Center of Attention for all the Wrong Reasons

The City of Edinburgh represents a picture of historic buildings and beautiful architecture, however it is due to these assets that has driven the city into the limelight of a shadowy affair.

During the past year it was brought to the attention of the press that so called Statutory Notices were at the center of fraud and corruption on the council's part.  Since then, nearly half the department in the property conservation department at the council have been suspended, albeit under 'precautionary' measures.

Members of this department were supposedly given bribes by contractors to make sure the work was allocated to them. On top of that, the contractors overcharged as well as in some cases provided such poor quality of work resulting in the works to be carried out again by another contractor.

For residents of the city of Edinburgh, they can't help but feel betrayed and dismayed at the whole situation; as the reason behind introducing statutory notices was to protect Edinburgh's precious architecture with due care and diligence on the council's part.

BBC1 Scotland screened a documentary detailing their own investigation and the amounts of money being exchanged over statutory notices is frightening.

http://www.bbc.co.uk/iplayer/episode/b0154z83/BBC_Scotland_Investigates_2011_Scotlands_Property_Scandal/

For anyone that is concerned about their own position regarding statutory notices from the past 6 years should contact the council whilst the police and Deloitte carry out their own investigations into the corruption claims.

Edinburgh University Student Fees

The unfolding story on what Student Fees will mean for the University of Edinburgh has developed further this week.

It is now thought that the funding gap caused by the Scottish Government's funding level of £5,000.00 per Scottish student versus the 'open market' price of £9,000.00 per annum for 'Rest of UK' (RUK) students is likely to cause a two-tier system of entry.  In short, it could mean that a lower achieving RUK student could effectively out bid a Scottish student with better exam results so that the university will receive more cash.

We are also likely to see more Scottish students wishing to study at Scottish universities as opposed to south of the border where they would have to pay fees for their courses.  This may result in increased competition for places at Edinburgh which is ranked 20th in the world.

We could also see some students wishing to come to Edinburgh purely for the kudos of it being the one of the most expensive universities to study in the UK.

More info on this hot topic can be found here... http://www.guardian.co.uk/education/2011/sep/12/scottish-universities-uk-students-fees

Edinburgh Course Fees

So, Edinburgh University has shown it's hand on the subject of student fees, stating that it will charge students £9k per year, up to £36K for a four year course.

This is only chargeable to English, Welsh and Northern Ireland students under the present policy, but means that Edinburgh would be the most expensive University in the UK for these students.  Scottish students would continue to study for free.

This will either mean that Edinburgh becomes a University for predominantly Scottish students, or becomes a 'must study there' destination for the wealthiest of the UK student population.  Time will tell and it remains to be seen what if any reaction comes from the Scottish Government in its future policy decisions on this subject.

http://www.bbc.co.uk/news/uk-scotland-edinburgh-east-fife-14784810

First Scottish University to charge tuition fees

Scottish Universities likely to be taken to court over student fees!

Aberdeen University has become the first Scottish University to declare that from 2012 it will charge students £9,000 per year for the first three years of their courses, with the fourth year free.  However, this does not apply to Scottish or EU students, but does affect those from England, Wales and Northern Ireland.

It is expected that the other Scottish Universities will make similar statements in the following weeks.

Unsurprisingly, this move is likely to be challenged by various students from England, Wales and NI.  The current Scottish Govt stance is seen by many to be illegal under European Law and contravenes the human rights of those students affected.

It seems probable that the differences north and south of the border will be resolved to bring about a fair system for all.

For property investors in Edinburgh, it is likely to mean that there will be an increase in student demand for Edinburgh properties as Scottish Students will have to compete in an ‘open market’ with those from England etc.  And with the University having more revenue it is likely to mean that they will look to offer more courses and be able to develop further infrastructure for future growth too.

Good News for Investors...

Finding suitable residential properties for investment purposes over the last 4 years has not been easy.  The main problem has been the high deposit requirements fom many of the lenders during this period.

 

There have certainly been good properties around at reasonable prices but the high cash input requirements have pushed the 'net returns on cash invested' down to typically 3.5 - 5.5%.

 

However the global economic turmoil we are currently witnessing has had a potentially positive effect on the buy to let market.  The reduction in the U.S. Credit Rating, the various ongoing problems with the Euro, and the tough stance on spending by the U.K. government have all lead the Bank of England to indicate recently that the base rate is going to sit at 0.5% for some time yet, possibly even until 2014.  The global bad news has also caused uncertainty in the share markets and the old favourites of gold and bricks/mortar in troubled times have been buoyed.

 

All of this has meant that the banks have been able to lower their risk margins when calculating their mortgage product offerings with some attractive deals now coming to the market.

 

The RBS, Northen Rock and Skipton B/Soc have all released deals in the last few weeks with 70% Loan To Value (LTV) rates at interest rates of between 3.69 - 4.9%, with varying, but reasonable, arrangement fees.

 

This has had the effect of pushing the 'net returns on cash invested' up to much more attractive figures of between 8.0 - 11.0% due to the reduced amount of cash now needed to acquire a property than was previously the case.

 

We will be searching for these types of properties in the coming months and will be circulating them to our clients.

Festival Time in the City

Cullen Property have provided some quick links for anyone wishing information on what is taking place during August in Edinburgh.

http://www.eif.co.uk/

http://www.edfringe.com/

http://www.edbookfest.co.uk/

Business as usual - despite the weather!

We are still open as usual, despite the weather causing problems.

If you do happen to visit the office, please take care on the pavements as they are very icy still.