Scottish listing prices increased by 1.7% in February, the biggest monthly jump since the 2007 taking the average value to a new record high of £169,742.
The latest data from the Your Move Scotland house price index also shows that the annual price growth has now reached 6% and there was a spike in sales of homes worth over £1 million, probably due to the introduction of the new listing tax in April.
The annual growth is the strongest it has been since August 2010 and Stirling experienced the fastest increase in listing values across Scotland during February, with house prices soaring 5.3% while Aberdeen, Edinburgh, East Lothian and Angus all set new house price peaks in February.
The index data also shows that overall sales were up 14% month on month but they are still 4% below the same levels seen in February last year.
Christine Campbell, regional managing director of Your Move, explained that the monthly growth was much higher than in England and Wales where it was just 0.4% in February.
‘The impressive rise in house prices in February has been influenced by the introduction of the new Land and Buildings Transaction Tax (LBTT) in April, as high end buyers sought to complete expensive purchases under the old stamp duty rates,’ said Campbell.
She pointed out that 15 listings priced at £1million or more were sold in Scotland during the month of February, compared to just six the previous month. ‘Tactical tax considerations have helped foster price growth in the Scottish housing market, and are likely to play a significant role in the months to come too,’ she said.
‘Now that the LBTT has come into force, we expect to see a temporary drop-off in the number of listings sold above £750,000, now liable for the top rate of tax, similar to the impact we’re currently seeing in London among £2 million listings in light of December’s stamp duty changes,’ Campbell added.
She also pointed out that typically in the housing market cycle home sales ease back in February, in the aftermath of the costly Christmas period but this February moved against the seasonal grain, with completed home sales up 14% on January levels.
A breakdown of the figures shows that over the past three months, completed home sales have fallen in every local authority area of Scotland on an annual basis, with Midlothian seeing the sharpest 31% drop.
‘However these year on year benchmarks have been artificially propped up following the extraordinary headway in sales activity over 2014, and as well as having to recalibrate onto a steadier course, the housing market this year also has an upcoming general election to contend with,’ said Campbell, who added that the slowdown in Scottish sales activity is being mirrored south of the border, as all across the UK political uncertainty is infusing home buyers with a new hesitancy.
‘But as soon as there is a stable government, there will be no reason to delay. Recent experience of the independence referendum reminds us that a celebratory resurgence of activity after the vote is concluded will even out any deficit beforehand,’ said Campbell.
‘With measures like the new Help to Buy ISA, lower transaction tax for the majority under the LBTT, and rock bottom interest rates on mortgages, buyers’ prospects are already greatly boosted, and political certainty will raise consumer confidence even further,’ she concluded.
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Source: Property News Spain