Teresa Hunter: Beware betting on Scotland avoiding house price falls

CAN A single market buck the trend? This is the question uppermost in many Scottish minds as they watch reports of house price falls across the UK.

Of course, Scottish housing transactions are included in the UK data, so if average property values fell by 1% compared with 12 months ago, as the Halifax reported on Friday, Scotland is in that mix somewhere, so it is hard to be terribly optimistic.

Then again, although we will have to wait another two months for the next Scotland-specific quarterly figures, recent data showed prices holding their own, if not actually rising.

Even the perennially pessimistic Capital Economics thinks Scotland could buck the trend, because property is cheaper compared with south of the border, and more manageable as a multiple of our salaries.

Anecdotally, a friend who lives in Edinburgh's West End tells me that two flats near her went so quickly that "sold" signs were erected before they could get the "for sale" posts up. That's an encouraging sign, and one not spotted for months in many parts of the UK. Then again, another friend tells me his flat in Leith is sticking.

Undeniably the market is slowing, and I'm not convinced Scotland can remain immune, although it may sidestep the excessive price corrections already evident in some overcooked hotspots in the south.

Furthermore, prices may be lower than elsewhere in the UK, but by historic standards they are frothy.

And another thing is for sure. Scottish borrowers have to resort to the same pool of mortgages as elsewhere in the UK. Though Abbey and Royal Bank of Scotland gave a welcome trim to some of their deals last week, costs have gone up and will remain high for some time.

Gibberish from FSA

I'VE been looking forward to the publication of the Financial Services Authority report into what went wrong at Northern Rock for months. I'm sad like that.

So imagine my disappointment when I found it completely unintelligible. I'm used to dealing with difficult documents, but could make neither head nor tail of what should have been a forensic analysis of events leading up to the run on the Rock, which reduced UK banking to a laughing stock.

I'm guessing it was deliberately written in code so lay people can't hope to get to the bottom of it.

I called the FSA to complain, only to be told that everyone was on a training course. For such small mercies, we must be grateful.

I finally tracked someone down, who pointed me to a statement put out separately stating that supervision had been inadequate.

Talk about the blindingly obvious. Just how stupid do they think I am?

A cruel tax

THERE is something awry with our inheritance tax laws when an elderly woman is forced to sell her home to pay her sisters' IHT bill, after living together all their lives.

Joyce and Sybil Burden have been battling since 1976 for the same tax concessions as a married or same-sex couple so that the survivor could stay in her home if the other dies. They took their case all the way to the European Court of Human Rights, which last week ruled against them.

This is a thorny issue which will have to be dealt with. Labour's plans to allow husbands and wives to transfer their IHT allowance will not help such couples. The Conservatives' counter-proposal to increase significantly the inheritance threshold for all will do more.

We will see many more such cases. While some of us may well live longer, others will not. For this reason, combined with high divorce rates, increasing numbers will find themselves alone in their twilight years.

What could be more natural than to go to live with a beloved brother or sister or lifelong friend? But how wrong if the tax authorities then force you out of your home when you are grieving the loss of your soulmate.

It's not over yet

SO LABOUR had a bad night on Thursday at the local elections in England and Wales. Well that's them finished, I've heard plenty say.

Don't be so sure. There are two years yet until a general election. A lot can happen in politics and the economy in that time. I'd say there's everything to play for.

Indeed, Thursday could turn out to be Labour's luckiest break. Had the result been simply dire, they might have limped on in their current bungling form. But this catastrophe will have to be dealt with.

And it could yet turn out to be a bad night for the Tories if, bloated with success, they revert to form.

The kaleidoscope of politics is turning. The old certainties and allegiances are falling away. We are at the dawn of a new era and there is no knowing what pattern will emerge after the next twist of the mirrors.