Scottish house prices and sales up in June

Scottish house prices rose in June, with the average price of a property north of the border now £169,227, according to new index figures.

Data from the report by Your Move shows that sales rose by 25% month on month, with year-on-year prices increasing by 1.2%.[1]

Changes

There have been a number of changes in the property market during the last twelve months, including the introduction of the new Land and Buildings Transaction Tax in April.

After a surge in sales in the upper end of the market before the tax was introduced, sales tailed off soon afterwards. However, the latest figures show that the price revival in June was driven by a resurgence of sales for million pound plus properties.

A rise of 25% in home sales in comparison to May was the highest month-on-month growth since July 2014. By region, Glasgow saw the greatest increase in sales activity during the second quarter of the year, recording an increase of 18% year-on-year.

‘The calm annual house price change of 1.2% recorded in June 2015 belies tumultuous currents of activity beneath the surface,’ said Christine Campbell, Your Move managing director in Scotland. ‘The Scottish housing market has been buffeted around by taxation.’[1]

Improvement

Campbell pointed out that in 2014, there were on average 12 £1m plus properties sold north of the border. In June 2015 alone, there were 6, indicating a marked improvement in the sector in just one month.[1]

On the mainland, the largest monthly rises were recorded, unsurprisingly, by the two most expensive local authorities in Scotland. East Renfrewshire and East Dunbartonshire shows jumps of 26% and 21% respectively during the month.[1]

Campbell said that, ‘more generally, the LBTT front loaded sales into the start of the year and activity dragged its heels throughout April and May, with the general election adding to the dampening effect.’[1]

Scottish house prices and sales up in June

For example, in Aberdeen, sales of detached homes fell by 39% between March in April but in June, there was a 25% month-on-month rise. In Scotland overall, there were 9,265 sales during June, the most activity since July 2014 and during the second quarter of 2015, sales of flats saw a significant year-on-year rise of 7%.[1]

Affordable

Campbell feels that the improvement, ‘stems from the stamina of the first time buyer market, as this property type tends to be the most affordable for those getting their first footing on the property ladder. This is especially the case in cities and Glasgow and Edinburgh accounted for 45% of all Scottish flat sales during the second quarter of 2015.’[1]

She went on to say, ‘affordability is the biggest steer to Scottish housing market at the moment. At £200,000, the average price of a flat in Edinburgh is more than one and half times as much as the cost of the typical flat in Glasgow which stands at £120,000.’[1]

‘As a result, Glasgow has experienced the strongest jump in house purchases overall, with sales up 18% in the second quarter compared with the same period in 2014, while Edinburgh sales have seen just a 2% upswing over the same period.  Low interest rates, competitive mortgage deals, and higher average earnings have caused a swell of confidence and buyer demand, particularly in cheaper areas,’ she said, adding that a lack of supply will keep the market open to stronger price surges,’ Campbell concluded.[1]

[1] http://www.propertywire.com/news/europe/scotland-property-prices-sales-2015081910880.html