Average house price soars to record high of £200,000
THE average house price in Scotland has risen above £200,000 for the first time, according to the latest research.
The value of homes increased by 8.5 per cent between December 2019 and December 2020.
Experts say the property boom is being fuelled by a break in Land and Buildings Transaction Tax (LBTT) – Scotland’s equivalent to stamp duty – which has saved buyers thousands of pounds.
The monthly Walker Fraser Steele Chartered Surveyors Index, produced by Acadata, revealed the average annual increase means that house prices in Scotland are now around £202,170, exceeding £200,000 for the first time.
John Tindale, Acadata senior housing analyst, said: ‘The LBTT tax, or rather the temporary holiday for some from having to pay it, is similarly having an effect on the behaviour of the current market.
‘The LBTT used to start at £145,000, at a rate of 2 per cent, but currently with the “holiday” it now starts at £250,000, hence saving the purchaser up to £2,100 in tax.
‘Monthly transactions have more than doubled since the introduction of the LBTT holiday in July, although part of this increase is to do with seasonal factors. Within this overall increase, the price range from £145,000 to £250,000 has seen a 102 per cent increase in the number of properties sold.
‘But the highest increase in market share, subsequent to the LBTT holiday, has occurred in the price range from £450,000 to £550,000, with a 177 per cent increase in transactions in this particular sector.’
The LBTT ‘holiday’ is due to come to an end at the beginning of April.
Perth and Kinross saw the highest annual increase, jumping from £199,556 in December 2019 to £232,745 in December 2020, a rise of 16.6 per cent. However, Aberdeen City saw the biggest fall, dropping from £198,659 to £192,741 over the same period, a decrease of 3 per cent.
Alan Penman, business development manager at Walker Fraser Steele, said there were a number of factors driving the market to record levels.
Mr Penman said: ‘The increase in the threshold for the LBTT played a key role in stimulating the market over 2020.
‘Indeed, the average number of monthly property transactions in 2020 doubled since the measure was introduced in July, though the easing of coronavirus restrictions may also have
‘Stimulating market’
played an important part in the increase in activity.’
However, figures just released by Revenue Scotland, the body that manages the LBTT, show house sales fell 48 per cent between December 2020 and last month – from 13,570 transactions to only 7,050.
David Alexander, joint chief executive officer of property firm Apropos, said: ‘These numbers show how dramatically the brakes are being applied to the Scottish housing market.
‘With the end of the LBTT holiday on the horizon, it is clear that many house sellers have taken advantage of the reduced liability.’