In quarter one of 2015, Scotland experienced higher annual house price growth (at 11.2%) than Greater London. The capital experienced 25.5% house price growth in the year to March 2015 – that’s Edinburgh by the way, not London, which could only manage a modest 6.8%.
In March, 83 houses worth more than £1m were sold across Scotland – the normal monthly figure being closer to 10 – with 46 sold in the last three days of the month. In fairness, there was a very clear external driver for this later phenomenon. Scotland took the decision to replace the Stamp Duty Tax, which remains in place across the rest of the UK with the Land and Buildings Transaction Tax (LBTT) on 1 April this year. The Scottish government’s wish was to introduce a tax more proportionate to the value of each property, proudly stating, ‘This government’s approach to taxation is founded on Scottish principles that have stood the test of time since the days of Adam Smith’ .
Fine words, but many took the view that the new tax disadvantaged higher value transactions, hence the rush to complete before the deadline. More recent data has pointed to a slowdown in property prices as figures published by the Edinburgh Solicitors’ Property Centre showed average property prices in the east central region of Scotland dropped 0.5% on the same time last year.
Looking more widely than high value cases, total sales in April rose by 18% compared to March in Scotland. Counter intuitively, the lack of higher value transactions (which were dragged forward into March) caused an apparent minor drop in average prices, in reality a statistical anomaly.
In contrast to London, both transactions numbers and prices are in fact enjoying real positive movement over the long term as the UK capital slows and in some areas reverses. Westminster and Holyrood do indeed seem to be on different paths right now.
