House prices rise as million-pound property sales resume

A REVIVAL in sales of million-pound properties helped drive house prices up by an average of £4,300 in June.

Estate agents say that a slowdown at the top end of the property market as a result of the introduction of the Scottish Government’s Land and Buildings Transaction Tax (LBTT) is coming to an end, with fresh activity in the property market boosting the price of property.

The average house price in Scotland was £169,227 in June, up 2.6 per cent on the previous month and 1.2 per cent on the previous year, according to the Your Move/Acadata house price index.

Six properties worth £1 million or more were sold in June, halfway towards last year’s average of 12 a month.

This is in stark contrast to the 88 such properties were sold in March as high-end buyers rushed to complete expensive purchases under the old stamp-duty rates, while none were sold in April.

Christine Campbell, Your Move Managing Director in Scotland, said the Scottish housing market has been “buffeted around by the changing tide of taxation” but is “now back in smoother waters”.

She said: “After a thundering wave of million-pound property sales in March, high-end purchases were beached when the Land and Buildings Transaction Tax (LBTT) first came into force and drained the activity from the top of the market momentarily. But million-pound sales are starting to make a comeback.

“As high-value sales return to normal levels, this will be reflected in more buoyant house prices.”

The biggest monthly rises were recorded by the two most expensive local authorities across Scotland, with properties in East Renfrewshire and East Dunbartonshire experiencing price jumps of 26 per cent and 21 per cent respectively in June.

The area with the largest fall in average prices in June was Inverclyde, down 18 per cent, while the second largest fall in monthly prices took place in West Dunbartonshire, where overall prices fell by 12 per cent.

The number of transactions in June rose, with 9,265 recorded by the Registers of Scotland, up 25 per cent on the previous month and 5 per cent higher than the previous year. It also marked the most activity since July 2014.

Estate Agent Rettie & Co’s Director of Research, Dr John Boyle, said: “These latest statistics show that the housing market in Scotland is stabilising, after a period of solid growth for around 18 months from mid-2013, and adjusting to quite marked political events and changes.

“We anticipate stronger market recovery over the next year or two due to improving economic activity levels, consumer sentiment, bank lending and new build activity.”

A separate report by the Office for National Statistics (ONS) said UK average house prices rose by 5.7 per cent in the year to June to hit £277,000.

Prices rose by 6.1 per cent year-on-year in England, 0.8 per cent in Wales and 9 per cent in Northern Ireland. However, the ONS data shows a fall of 0.6 per cent in Scotland – the first annual drop since September 2013.

Source: The Herald

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