There has been good news north of the border with the announcement that home sales reached a seven-year high during July. What’s more, prices rose by 0.4% in comparison to June, latest data indicates.
The most recent Your Move Index also shows that overall sales were up by 6%, with annual price growth slipping marginally by just 0.1%. This took the average property price to £165,162.[1]
Stamp Duty
A rise in sales is said to be down to buyers cashing in on lower stamp duty under the new Land and Buildings Transaction Tax, which was introduced in April. In addition, activity is moving up just as the supply of new house building in Scotland has reached its highest level since 2010/2011. However, the report suggests that there is hesitation at the top end of the market, leading to prices falling fractionally in comparison to 12 months ago.
‘Activity has been picking up speed in recent months. Lower stamp duty for purchases below £325,000 under the (LBTT) first got the ball moving in April,’ observed Christine Campbell, Your Move’s managing director in Scotland. ‘Since then, the conclusion of the general election, supply of new build homes and the favourable mortgage rate environment have only added to this momentum.’[1]
Campbell noted that,’ after a slightly sluggish start to 2015, sales in the first seven months are exceeding those in 2014. It’s the middle and lower end of the housing market where the tempo is really quickening.’[1]
Soaring stock
Data shows that Stirling saw the largest leap in property sales month-on-month during July, rising by a substantial 49%. Flats were the most commonly sold property type.
‘Across Scotland overall, we’re witnessing fewer top end home sales in 2015 than in 2014, due to the steeper transaction costs now incurred,’ continued Campbell. ‘The proportion of homes in Scotland sold for more than £325,000 has fallen from 9.2% of all property sales in July 2014, to just 7.8% a year later under the revised taxation system.’[1]
Campbell feels that, ‘at the same time, there’s been a lot of propulsion emanating from the first time buyer market, feeding off a flurry of new build housing.’ She went on to say the Your Move’s analysis, ‘shows that the average price of a first-time buyer property has risen 6% from the second quarter of 2014 to the second quarter of 2015 as a result of this burgeoning demand.’[1]
Building success
Your Move’s report indicates that the total number of new build properties in Scotland has reached its greatest level since 2010/11. Glasgow saw the largest rise in new homes built in the last twelve months, closely followed by Aberdeenshire and Edinburgh. This in turn has helped these areas become the top areas for many new buyers looking to get a foot onto the property ladder.
‘With housing market activity mostly concentrated at the lower rungs of the property ladder and a dearth of top end property purchases, overall Scottish house prices have dropped marginally year on year,’ Campbell commented. ‘As of July 2015, average house prices in Scotland are down 0.1% annually, equivalent to falling £176 in 12 months,’ she added.[1]
She feels however that, ‘this looks to be a short-term symptom, and growth is starting to shore up. On a monthly basis, property values have seen a 0.4% uplift in July, on par with the growth recorded south of the border across England and Wales the same month.’[1]
‘More expensive areas are starting to see price growth return, following the immediate stagnation in the aftermath of the introduction of the LBTT and it was the area with the highest average property values which saw the strongest monthly growth. Edinburgh saw the biggest boost in prices during the month, up 3.7% since June, as top end buyers start to swallow the new stamp duty costs after the initial shock,’ she concluded.[1]
[1] http://www.propertywire.com/news/europe/scotland-residential-property-prices-2015091610987.html