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Wednesday, October 14, 2015

Scottish property price fling - up £1850

The average Scottish property price jumped by £1850, up 1.1% during August according to the LSL Scottish House Price Index.

The average Scottish property now costs £167,426. 

Christine Campbell, Your Move managing director in Scotland, comments:

“The colour is starting to return to the cheeks of the Scottish property market, with house prices brightening by £1,850 (1.1%) in the month of August, and starting to shake off the side effects of April’s Land and Buildings Transaction Tax. The change in tax regime caused a three month decline in house prices between April and June, but now standing at £167,426, the average house price in Scotland has climbed out of its short-term slump, and is once again higher than at the end of last year.

On an annual basis, house price growth is showing healthier vitals too. The LBTT has slowed high value property sales considerably, which is still muffling the average house price in Scotland. Since the LBTT came into play, the number of million-pound property sales has fallen to an average 4 per month over the last 5 months, down from 12 in 2014. But it’s not just at the very extremes that this has had a dampening effect – the brakes have been applied to all sales above £254,000.

As a result of the tougher top-end tax rates, the most expensive parts of the country have recorded price falls year-on- year, and this is starting to close the price gap between Scotland’s preeminent cities. On an annual basis, house prices in Glasgow have increased by 6.5% to reach £141,871, compared to a 3.4% decrease of property values in Edinburgh since last year. As the area with the highest house price across Scotland, Edinburgh’s price fall encapsulates the current trend of declining house prices in high value areas qualifying for higher rates of transaction tax.

But the middle and the lower tiers of the market have got a new lease of life under the new tax regime. Scottish property sales totalled 9,151 in August 2015, a 7.5% uplift on a year ago, and representing the highest number of sales for the month of August since 2007. This also marks the fifth month in 2015 to date where sales have overtaken the equivalent month in 2014. 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. From May to July 2015, semi-detached homes have seen the largest annual uplift in sales in Scotland, soaring 5%, and this was closely followed by a 4% boost in flat purchases compared to a year earlier. In contrast, sales of more expensive detached properties are down 4% year-on-year.

Overall, the activity emanating from the bottom of the property market means that from June to August 2015, Scotland has experienced the strongest year-on-year increase in property sales of any part of Britain, with sales climbing 6%. Meanwhile, sales volumes were down by 2% across England and Wales and seven regions saw sales fall over the same period.” 

lsl scottish property price index August 2015

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