Rush to beat tax surcharge leads to eight-year high for house sales in Scotland

The Your Move/Acadata House Price Index found that Scotland experienced its busiest March for house sales in eight years, up 21% between February and March to 7,770 sales.

Your Move managing director, Christine Campbell, said that while March was a good month for Scotland, sales were not as strong as in England.

“This short-term boost in sales has been fertilised by the flurry of buy-to-let and second-home buyers, eager to purchase before the introduction of the 3% surcharge on Land and Buildings Transaction Tax (LBTT) in April,” she said.

“However, Scotland’s sales did not rocket at the same rate as those south of the border, which soared by 60% month-on-month in March,” added Campbell. “The more modest increase in Scotland may have been due to John Swinney announcing the changes a month later than George Osborne, so many second-home buyers may not have had time to plan their investments.”

But she highlighted that Scottish sales for the first quarter of this year are still well above the same period in 2015, up 18% year-on-year.

The council area of Midlothian experienced the fastest increase in sales in the first quarter, rising 48% compared to the same period last year, due to a boom in residential construction in the area.

While the data showed an increase in the price of houses in Scotland between February and March, up 0.8% to an average of £169,379, prices remain considerably lower than last year, down 9.7% from the £187,646 average in March 2015.

However, Campbell said that the monthly increase was a positive sign.

“The Scottish housing market has now thawed from the winter frost, bouncing back from February’s 1% dip in property values. March has seen steady regrowth in house prices, experiencing the fastest month-on-month upswing since August 2015,” she said.

“While house price growth is down year-on-year, it’s important to remember that this was due to the huge spike in house prices back in March 2015, following a rush of sales brought forward to avoid the introduction of the LBTT.”