Warning That House Price Growth Spurt Won't Last
A report claims the Scottish housing market is ``galloping ahead'' of the rest of Britain - but the bounce could be short-lived.
The Scottish housing market is galloping ahead'' of the rest of Britain - but the bounce could be short-lived, according to a report.
The latest Your Move/Acadata Scotland house price index found home values north of the border jumped 0.8%, or £1,360, in November, twice the pace seen in England and Wales.
It means that average Scottish property prices increased by £45 a day that month, taking the typical house price across the country to £169,850.
Experts said it represented welcome news for homeowners after a turbulent year but warned the growth spurt may not last long.
Christine Campbell, Your Move managing director in Scotland, said: The Scottish housing market has been making up for a bit of lost ground and in the short-term is galloping ahead of the rest of Great Britain.''
Despite the bounce back,'' average house prices remain below March's record peak of more than £187,000.
The driving force behind the difference is said to have been the introduction of the land and buildings transaction tax (LBTT), which lowered tax for the majority of buyers but hit the top end of the market.
Ms Campbell cautioned November's growth spurt may be short-lived''.
She said: Now with (Finance Secretary) John Swinney's 3% surcharge on second home and buy-to-let property purchases coming into force in April, price rises could find themselves hindered.
If the impact of this tax increase mirrors the effect of the LBTT, we may see a sharp spike in values at the start of 2016 as buy-to-let buyers rush to avoid the tax hike, followed by a sudden dip after its introduction.
Investors may well be dissuaded from purchasing additional properties then, with a £250,000 home liable for an extra £7,500 in stamp duty once the tax is implemented.''
November's home sales also avoided the usual seasonal slowdown. Transactions that month increased by 1.2% on October, in a period where a 4% dip is usually experienced.
Regional figures show East Lothian overtook Inverclyde in November as the mainland region with the highest annual increase in property prices (10.9%).
This region illustrates the recovery in the top end of the market with 30 sales of properties worth over half a million pounds in the last three months, a significant improvement on 18 sales in the same period last year,'' Ms Campbell said.
The most notable of the sales was a nine-bedroom property going for £2.6 million - the second-most expensive property sold this year.''
John Tindale, senior housing analyst for Acadata, said transactions were 13% higher in November 2015 than a year earlier.
He added: Unfortunately, the record-breaking levels of rainfall over much of Scotland in December and subsequent flooding will have taken its toll in terms of the number of properties sold during the month.
We await the RoS (Registers of Scotland) figures on this with interest and some concern - our sympathies go to those who have been adversely affected by the floods.''