ASK THE EXPERTS
BELL INGRAM’S, CARL WARDEN, JOINS US THIS MONTH TO ANSWER A QUESTION ABOUT THE STATE OF THE SCOTTISH PROPERTY MARKET.
ALL WE SEEM TO HEAR ABOUT THESE DAYS IS UNCERTAINTY AND THE NEGATIVE IMPACT IT IS HAVING ON THE PROPERTY MARKET. IS IT REALLY ALL DOOM AND GLOOM?
ANSWER: The answer is really yes and no. We have been facing challenges for a number of years now which have significantly constrained certain sectors of the market. However, 2017 saw the strongest residential market in a decade with over 100,000 transactions. Although the bulk of these transactions were for properties under £200,000, the strongest growth in activity was above the £400,000 mark with a 23% annual increase. House prices in Scotland are expected to grow by 17% over the next five years compared to a UK 14% .
On the gloomier side, LBTT which has been suppressing the market is unlikely to be subject to change any time soon despite the Scottish Government’s reduced forecasts for revenue from LBTT. Keen to protect tax revenues, the Government is more focused on getting people onto the housing market than relieving pressure at the top end. New rental taxation, laws and leases are attempting to release housing stock back to the market but rents are increasing to recoup the loss. In short, government policy is supporting the lower end and hammering the higher.
On a positive note, the new build sector is performing well, largely driven by the lack of second-hand properties available and the flexibility, incentives and contributions offered by developers. We recently brought to the market eight luxury apartments within a B-listed baronial mansion in Oban ranging in price from £137,000-£247,000. All eight apartments were reserved within 48 hours.
The news is more positive than negative. Lowering stock is driving demand but the market has become more educated to LBTT and seeks a discount to offset this cost. While buyer sentiment will likely remain sensitive in the build up to Brexit, the Government’s loss of seats in the 2016 general election means that the threat of ‘Indyref2’ is no longer generating the same uncertainty.