Scottish Property Prices in Record Increase
Recently released data has shown that Scottish property prices rose considerably during February.
Record
Latest figures from the Your Move Scotland house price index indicate that prices north of the border rose by 1.7% during February. This was the largest monthly increase since 2007 and left the average property price at a record high of £169,742.[1]
February’s report also indicated a 14% month-on-month increase in property prices, but the numbers were down 4% on the same month in 2014.
The figures also showed that annual property price growth in Scotland now stands at 6%, the strongest figure since 2010.[2]
Impressive
The records showed that Scottish property prices rose at a higher rate than in both England and Wales during February, where growth was only 0.4%. Christine Campbell, regional MD of Your Move, offered a reason for the record growth. Campbell said that, ‘the impressive rise in house prices in February has been influenced by the introduction of the new Land and Building Transaction Tax (LBTT) in April, as high end buyers sought to complete expensive purchases under the old stamp duty rates.’[3]
Pointing out that fifteen properties priced at £1m or over were sold during February, in comparison to six in January, Campbell believes that a number of people are making, ‘tactical tax considerations,’ which are likely to, ‘play a significant role in the months to come.’[4]
LBTT
The Land and Building Transaction Tax, effective from 1st April 2015, has seen properties valued at over £750,000 facing a 12% tax. Campbell believes that, ‘now that the LBTT has come into force, we expect to see a temporary drop-off in the number of properties sold above £750,000, now liable for the top rate of tax.’ This, Campbell said is, ‘similar to the impact we’re currently seeing in London among £2 million properties in light of December’s stamp duty changes.’[5]
Scottish Property Prices in record increase
Campbell also pointed out that the rise seen in February went against the seasonal norm, with a much larger rate of growth recorded than in previous years.
However, figures recording the previous three months indicate that all areas across Scotland have seen a year-on-year dip in completed home sales. Midlothian saw the sharpest decline of 31%. [6]
Artificial
Responding to the annual decline, Campbell said that,’ these year-on-year benchmarks have been artificially propped up,’ as a result of, ‘extraordinary headway in sales activity over 2014.’ Campbell also believes that with the housing market having, ‘an upcoming general election to contend with,’ this political uncertainty will reflect in lower sales both north and south of the border.[7]
Optimism
She went on to state that, ‘as soon as there is a stable government, there will be no reason to delay. Recent experience of their independence reminds us that a celebratory resurgence of activity after the vote is concluded will even out any deficit beforehand.’[8]
Citing measures such as, ‘the new , lower transaction tax for the majority under the LBTT and rock bottom interest rates on mortgages, Campbell is convinced that, ‘buyers’ prospects are already greatly boosted.’ The election result and subsequent, ‘political certainty will raise consumer confidence even further,’ she believes.[9]
[1-9] http://www.propertywire.com/news/europe/scotland-house-price-growth-2015042210420.html
