A new report has indicated that the Scottish property market has remained steady, despite recent tax disruptions.
Data from Your Move has indicated that house prices north of the border are up 10.3% since May 2014. This represented twice the annual rate of growth recorded in England and Wales.
‘Two months into Scotland’s new transaction tax regime and the impact of the overhaul is still reverberating around the property market,’ said Christine Campbell, Your Move managing director in Scotland.’ Meanwhile a sweeping political transformation in May – both in Scotland and the rest of the UK – was a fresh source of uncertainty for those considering the best time to move home. These winds of change have buffeted buyers and sellers, and it’s harder to make out the underlying course of the market as a result.’
Campbell feels that, ‘the trends that can be gleaned are positive,’ and says with, ‘Scottish house prices up by more than ten per cent on an annual basis,’ the sentiment from buyers in their braches, ‘is upbeat as the stability of the housing recovery shines through.’
She concedes that, ‘there is no denying that the recent tax turbulence has affected property prices in the shorter-term, with the latest monthly dip testament to further-shock-waves of the LBTT as the market continues to absorb the change. May’s monthly fall of 2.1% (equal to £4,000) is the largest backwards step we’ve experienced for nearly six years. However, this must be considered in the context of following an exceptional leap in March, when prices soared a record-breaking £16,000 as a result of frenetic movement at the top-end of the housing market, with 84 properties worth £1million or more changing hands before the stamp duty switchover.’
Continuing, Campbell noted that since the new regime came into force, there has, ‘been only one million-pound home sold in Scotland in the past two months, which is reining back current measures of growth.’ She said that during May, ‘it was the most expensive parts of Scotland that saw average property prices slip backwards.’ House prices in Edinburgh were found to have slipped 5.7% since April, with East Lothian experiencing a drop of 11.2% during May.
More positively, Campbell feels that the, ‘downwards correction we’re seeing in May has not undone the progress that’s been made so far this year-in the midst of all this disruption, Scottish house prices have risen by 7.6% since January. In another sign of the strength at the core of the housing recovery, May also marks a considerable breakthrough for our second city – with average house prices in Glasgow finally exceeding their 2007 housing boom high, and reaching a new peak of £146,286 in May 2015.
Tenacious demand for homes has been the key driver propelling prices out of the shadow of the financial crisis, and Glasgow has seen the most property sales in Scotland in 2015 so far – accounting for 12.5% of all activity in the housing market. The average price for a flat in the city has risen from £105,000 in 2014 to £120,000 in 2015.’
Concluding, Campbell said, ‘There was a 15% spike in home sales in the immediate run-up to the introduction of the new tax. In contrast, there were just 7,386 sales in May 2015, 10% lower than April levels as activity returns to normal, and starts to iron out the recent discrepancies.’ She is of the opinion that, ‘with the vast majority of Scottish homebuyers likely to be budgeting less than £254,000-and so benefiting from reduced transaction costs under the new banding-activity should soon settle back into its natural stride once more.’