The reduction of LBTT has created more movement at the affordable end of the market, writes Beverley Brown
The introduction of the Land and Buildings Transaction Tax (LBTT) last year ago was designed to make buying a home in the lower to mid prices range more affordable – and having had time to assess its impact, the evidence a year down the line shows the new tax has led to a whopping 11 per cent increase in sales.
According to the latest Your Move/Acadata House Price Index, there were 104,344 houses sold in the last year compared to 93,601 sales the previous year.
Christine Campbell, Your Move managing director in Scotland, said: "These figures confirm that lower purchase taxes for property can significantly boost activity in the housing market, while also allowing first time buyers to get a foot on the ladder. The Scottish Government should consider lifting the LBTT bands higher if they want to build on the foundations of this policy in order to support Scotland’s fragile property and construction sector.
"However, house prices are still down 7.8 per cent year-on-year in April, with a typical home in Scotland now worth £170,667. In part, this drop in property values was caused by a spike in high value sales before LBTT was introduced, but today’s market hasn’t regained those losses yet."
Figures for each local authority reveal East Renfrewshire now has the highest average house price in Scotland (£249,238 in April, albeit a drop of 1.8 per cent year-on-year), which puts Edinburgh City in second place at £247,922.
Aberdeen City takes the biggest year-on-year hit with a 19.9 per cent decrease in average value, down to £199,133 in April 2016 compared to £248,707 the previous year.
Full steam ahead
Scanning Rettie west end’s current property list recently I had difficulty seeing what was for sale due to the very high number of homes sporting either Sold or Under Offer banners.
The property market in Glasgow’s cosmopolitan heartland has always bucked the trend and the current political uncertainty appears not have changed anything, as Rettie’s valuer Jamie Osborne, quipped: "We are selling everything that comes on – and at good prices.
"One house recently sold within four days, while back in March another was valued, sold and the owner moved out, all within the month, which is a first for me."
Slater Hogg’s Byres Road branch is seeing similar levels of activity, which valuer Iain Sinclair wryly compared to a freight train over a cliff – once it starts there’s no stopping it.
Registers of Scotland (RoS) has published the first single official UK House Price Index (HPI) which will continue on a monthly basis to deliver more accurate property figures for the UK as a whole.
This index has come about as a result of a collaborative effort initiative involving RoS, the Office for National Statistics, Land Registry for England and Wales and the Land & Property Services Northern Ireland to address the 2010 recommendation for a "single definitive house price index produced by the official statistics producer community".
The new UK HPI becomes part of a suite of statistical publications produced by RoS, which will continue to publish quarterly house price statistics for Scotland in parallel with the new monthly UK HPI.
To see the UK HPI visit www.gov.uk or see the link at www.ros.gov.uk
Content to rent
Curiously, given that most surveys say the majority of tenants see owner occupation as their end goal, new statistics (it’s difficult to get away from numbers this week) from Edinburgh and Glasgow-based agency DJ Alexander Lettings, says otherwise.
The firm, which has some 4,500 properties under management across both cities, surveyed all tenants whose leases ended between February and May.
Of the 230 who responded, only 17 per cent said they were switching to owner occupation. The remainder said they intended to continue renting, either trading up or down or to another location prompted by a change of job or lifestyle.
Rob Trotter, an associate director with the company, said: "Although not all departing tenants responded, the sample was large enough to suggest the replies were typical of tenants as a whole."
The company plans to monitor the
future intentions of departing tenants on a regular basis.