Member Article

Scotland's house prices dip despite surge in sales

Scotland has seen the first dip in house prices in eight months, despite surge in sales accoridng to the Your Move Scotland House Price Index.

Average property prices in Scotland have fallen by 1.0% from January. This represents the first monthly drop in home valuues since June 2015.

This news comes despite strongest February for home sales since 2008, with transactions up 19% year-on-year after a flurry of buy-to-let buyers.

Christine Campbell, Your Move managing director in Scotland, comments: “Scottish house prices have taken a small stumble in February, with the value of a typical home falling by 1% (£1,688) month-on-month. The sudden dip in prices will be a welcome reprieve for those attempting to get their foot on the property ladder, as this is first decline in Scotland’s home values seen in eight months. House prices are also down compared to the same time last year, but this tells us more about the turbulence caused by the introduction of the Land and Building Transaction Tax (LBTT) at the beginning of 2015, than anything happening in the market right now.

“In fact, another key barometer is pointing to a lot of positivity in the market. Property sales in Scotland have flouted seasonal trends to jump 10% month-on-month, representing the highest February home sales since 2008. With a flurry of buy-to-let and second-home buyers racing to avoid higher rates of LBTT after 1st April, sales in February are up 19% year-on-year. This impetus also meant that purchase activity was concentrated at the lower end of the market – with aspiring landlords snapping up affordable options. We can see evidence of this in Edinburgh and Glasgow, where sales of flats – a popular investment choice – have soared in the three months to February 2016. But at the same time, there has been a slowdown at the top-end of the market due to uncertainty surrounding the upcoming Scottish Parliament election and EU referendum, particularly among foreign buyers. This imbalance between the volume of cheaper and more expensive property sales is skewing the overall measure of price growth, and tipping it downwards.

“While the expensive side of the market pauses for breath, uncertainty surrounding the upcoming votes provides a great opportunity for those wanting to buy their first home. With stable house prices, low interest rates and reduced levels of LBTT on cheaper properties, now is the perfect time for first time buyers to take the plunge.”

To read the full Your Move Scotland House Price report clickhere.

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