Scotland Sees Rise In House Sales
14 October 2015, 06:00
Scotland has seen a much bigger increase in housing transactions than any other part of Britain despite a high-end tax hike and a slump in the oil industry, an estate agent has found.
There were 28,191 property transactions in June to August 2015, a 6% rise on the same quarter last year, compared with a 2% fall in England and Wales from 241,521 to 237,057, according to analysis by Your Move.
The recent introduction of a new devolved Land and Buildings Transaction Tax (LBTT) in Scotland at a higher top-end rate than UK stamp duty "is stimulating demand at the bottom and middle rungs of the property ladder''.
But the high-end tax hike has failed to deter some premium property buyers, with a £920,000 sale in Duns boosting average house prices in the Scottish Borders despite an LBTT rate nearly twice as high as stamp duty on similarly priced properties just 15 miles away in England.
The slump in the oil industry has "taken its toll'' on expensive house sales in the Aberdeen area, with sales of detached properties falling 41% in the city and 25% in Aberdeenshire.
Your Move said "there is evidence of a north/south divide in England and Wales, with those regions in the north of the country seeing higher growth in transaction levels compared to the south''.
House prices in Scotland rose 1.1% in August, the second month of growth since LBTT was introduced, taking average Scottish house prices back above December 2014 levels "as they rally from post-LBTT slump''.
August was the strongest month for sales in eight years, with activity up 7.5% on an annual basis, with LBTT driving a faster annual sales growth over the summer than anywhere else in Britain, according to Your Move.
Semi-detached homes have driven price rises and sales growth - with only six sales of £1 million-plus properties in August.
Christine Campbell, Your Move managing director in Scotland, said LBTT has given "the middle and the lower tiers of the market a new lease of life''.
"This rapid recent growth in Scotland is grounded in the new LBTT rates, which are stimulating demand at the bottom and middle rungs of the property ladder,'' she said.
John Tindale, senior housing analyst for Your Move partner Acadata, said: "The housing market remains robust in Scotland, despite a falling off in high-value sales.
"Scotland has seen a far higher increase in housing transactions than any other country/region in Great Britain over the three-month period June to August 2015, compared to the same three months in 2014.
"Within England, there is evidence of a north/south divide, with those regions in the north of the country seeing higher growth in transaction levels compared to the south.''
He added: "Interestingly, the main growth in Scotland has been in the sale of semi-detached properties and in flats, with sales of detached homes seeing the number of sales fall.
"Some of this change in buying patterns is to do with the new LBTT rates, where the tax thresholds at £145,000 - when the LBTT rate becomes 2% - and at £250,000 when the tax rate increases to 5%, are influencing the purchaser's decision-making process.
"The current average price for a semi-detached property in Scotland is £171,000 and for a detached property it is £248,000.
"The local authority area on the mainland that saw the highest rise in prices in the month was the Scottish Borders, where the average price of semi-detached properties rose by #80,000 in the month, a result of a near-£920,000 transaction in Duns.
"Duns is approximately 15 miles from the Scotland/England border.
"It is interesting to consider that on a transaction of this size, the English stamp duty payable is #36,000, whereas the Scottish stamp duty amounts to £69,000.''