House price boom begins to cool after rises of £1k a month
SCOTLAND’S house price boom is slowing despite prices increasing by more than £1,000 a month over the past year, according to experts.
Estate agents say the ‘tide is turning’ on property prices despite a year of soaring profits for sellers.
The latest figures show the average home in Scotland cost £181,415 in March, an 8 per cent or £13,502 increase on the same time 12 months previously.
But the amount represented a slight decline in the average house prices seen in February and a £2,731 drop from the peak in January as recorded by Registers of Scotland (RoS).
David Alexander, chief executive of property group DJ Alexander Ltd, said: ‘Average prices in Scotland peaked in January 2022 at £184,146 and have fallen 1.5 per cent in the subsequent two months.
‘While this is not a large fall over a quarter it is an indication that the tide is turning on house prices and we are starting to see the substantial price rises of recent years begin to fall.
‘I think we are about to see average house prices falling month by month until they fall to nearer 3 to 4 per cent annual increases.’
RoS business development director Kenny Crawford also suggested the data reveals a cooling in the market.
He said: ‘Average prices have increased in every month since July 2020 when comparing with the previous year, and the annual increase has been in excess of 5 per cent in every month since October 2020.
‘In comparison, in the 12 months to October 2021, the annual increase only exceeded 3 per cent on one occasion.’
All local authorities experienced annual house price increases, except for Shetland where a low number of transactions typically skew data.
Falkirk saw the greatest growth, with prices rising more than 19 per cent to £161,602.
Aberdeen recorded the smallest increase of only 0.1 per cent to £142,804.
Edinburgh remains the most expensive place to purchase property, with a typical home costing £322,855.
Detached homes continued to increase most in value, while flats recorded the smallest growth. Mr Alexander added: ‘The continued popularity of detached properties again reflects the enormous demand that this sector of the market gained during lockdown.’
Meanwhile, rental prices in Scotland saw another record annual increase of 2.9 per cent in the year to April, according to the Office for National Statistics (ONS). It is the second month in a row annual growth has hit a new high.
The Mail told this month how Scotland’s housing boom had pushed nearly half a million homes into a higher tax bracket. Purchasers faced having to find extra money to cover the Land and Buildings Transactions Tax (LBTT), Scotland’s equivalent
‘Indicates the tide is turning’
of stamp duty, as well as covering the rise in property prices.
Across Scotland, 421,000 properties have moved up a tax bracket since March 2020, with nearly 180,000 hitting the £145,000 threshold at which LBTT is paid for the first time.
Just over 146,000 jumped into the £250,000 bracket, around 87,000 rose to above £325,000 and more than 7,000 are now worth more than £750,000.
The threshold for LBTT, set in 2015, is £145,000, with buyers having to pay a 2 per cent tax on the amount between that and the next band, which starts at £250,000. Between £250,000 and £325,000 the rate is 5 per cent, then it rises to 10 per cent up to £750,000 and is 12 per cent above that.