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Expect Q1 Scottish mortgage lending spike – Gray

by: Paul Robertson
  • 10/12/2014
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Expect Q1 Scottish mortgage lending spike – Gray
The market could see a spike in Scottish mortgage lending in the first quarter of 2015, according to Barclays Bank.

A restructuring of Land and Buildings Transaction Tax in Scotland will be introduced at the beginning April 2015. This will replace the UK Stamp Duty system and the change will make a significant difference for properties valued at over £250,000.

Andy Gray, managing director of Mortgages at Barclays, said: “Under the Scottish scheme, the fee will be 10% on any amount between £250,000 and £1,000,000, however under the UK scheme, the fee is now 5% between £250,000 and £925,000.

“So Scottish purchases between now and 1 April 2015 will be charged at 5% but thereafter the charge will double.”

He acknowledged that the number of such transactions were significantly lower than in the rest of the UK but argued there was still potential to have a major impact for affected transactions in Scotland.

“If the proposed 10% fee stays as planned, it could result in a spike in transactions in the first quarter of 2015 up to the 31 March deadline and a subsequent drop-off thereafter. One to keep an eye on in the New Year,” said Gray.

Proposed Scottish Land and Buildings Transaction Tax rates on residential properties from 1 April 2015 are set at nil for properties to £135,000, 2% for properties £135,001 to £250,000,10% for homes £250,001 to £1,000,000 and 12% thereafter.

For recent changes to the UK Stamp Duty click here.

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