Member Article

Strongest Scottish house price growth for seven months

Property price rises accelerate in December, showing the fastest year-on-year increase since May.While average home values bounce back from summer slip to reach £170k, after 2.5% rise across 2015.

Christine Campbell, Your Move managing director in Scotland, comments: “The Scottish housing market finished the rollercoaster year on a high, with average house prices growing 2.5% over the course of 2015. This is the fastest year-on-year rise in property prices seen for seven months and the £4,000 jump in the value of a typical property is a well-deserved reward for Scottish homeowners after a volatile year. But the increase over the year to December is still below the 4.4% rise in 2014, as growth was skewed by the introduction of the Land and Buildings Transaction Tax (LBTT). December saw house prices rise 0.8% (£1,309) from the previous month – a rate of growth which hasn’t been beaten since March. The average house price has now broken through the £170,000 barrier again for the first time since May, as the market sets course in the right direction.

“2015 was a turbulent ride for some parts of Scotland. Aberdeen experienced the biggest dip in house prices on the mainland last year, with property values in the area falling 6.8% (£15,551). This decline has been driven by the drop in demand for homes in the area, as the tumbling oil price reduces employment and investment into the city. Aberdeen has also felt the negative affect of the introduction of the LBTT, as it’s home to a large number of higher value properties which the tax hit hardest. The city has now slipped to sixth in the house price rankings, down from third at the end of 2014.

“While property prices have been held back by higher LBTT rates at the top of the market, the tax has spurred a surge in Scottish home sales. December saw the highest property sales for eight years, up 21% on the same month in 2014. Total sales for the year were 6% higher than 2014, in stark contrast to England & Wales where sales are down 2.6% year-on-year. In Scotland, the type of homes selling swiftest are flats, up 18.4% in the last quarter of 2015 compared to the same period in 2014. The smallest increase was in pricier detached properties, but sales still rose 8.8% over the same time period. As typically the cheapest type of property on the market, flats have benefited most from the switch to LBTT which removed tax paid on purchases under £145,000. With an extra 3% surcharge on second homes coming into force in April, we can expect another jump in sales during the first quarter of 2016, as sellers hurry to beat the tax hike.

“The million pound property market has seen the most extreme changes this year. Overall, there has been a 30% annual increase in the sale of high value homes in 2015. Half of these sales came in March, as owners rushed to beat the introduction of the LBTT. This was followed by a short-term drought which saw the average number of million pound sales fall to just 3.5 per month in the four months immediately after the tax rise. However, the top end of the market is firmly in recovery, with the number of £1m sales increasing to an average of 10.5 a month in the last four months of the year, not too far off 2014’s average of 12 sales each month.”

To read the full Scotland House Price report please click here

This was posted in Bdaily's Members' News section by Property Editor .