Referendum relief sparked late commercial property deal rush
A LATE boost following the independence referendum helped commercial property transactions bounce back from a slow second quarter to hit their highest level since the recession, according to the Scottish Property Federation (SPF).
The group’s analysis of data from the Registers of Scotland shows the total value of deals hit £962 million in the third quarter, compared to £592m in the previous three months.
SPF director David Melhuish said uncertainty ahead of the vote was the only explanation he could think of for the relatively poor performance earlier in the year, and anecdotal evidence suggested that some buyers had been awaiting the outcome before going ahead.
“I think it wasn’t all after 18 September but we definitely saw some significant volumes happening after,” he said. “There were hotels that sold the day after the referendum, and they were large deals. People were just having a wait to see what the outcome would be.”
Melhuish said he did not think buyers would necessarily have backed out of deals had Scotland voted for independence, but firms would have wanted to see how things played out.
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commercial property groups reported a marked summer slowdown in the Scottish market this year which was widely attributed to the uncertainty factor created by the referendum. Several have since said that they saw a pick up as pent-up demand was released when Scotland voted to stay in the union.
But the SPF also pointed out that investors could be rushing to do high-value deals taking place before the stamp duty land tax (SDLT) is replaced by land and buildings transaction tax (LBTT) at the start of April 2015. It warned that if the tax is seen to be too penal by investors, it could cause the Scottish property market to be perceived negatively.
Although the Scottish Government estimates that 95 per cent of transactions will pay the same or less under the new system, the figures show that most of the recent deals would have faced higher tax liabilities.