House price increases in Scotland outstrip England and Wales
In the last twelve months, house prices in Scotland have risen by 11.2% which far outstrips the 5.6% that have been seen in England and Wales. Edinburgh in particular has seen strong growth, with price increases in the order of 11.8% in one month alone. It would have seemed inconceivable a year ago to see house prices in Scotland rise faster than in London, but that has been the case.
The reason for the sudden increases in price is due to sellers jumping in to beat the Land and Buildings Transaction Tax, which was introduced in Scotland on the 1st of April and completed sales increased by 29% especially at the top end of the market. In March 36 homes worth £1 million or more were sold, this is the highest ever in a single month. This mad scramble in March undoubtedly boosted prices and this is unlikely to be maintained in the future.
Scotland has seen house prices increase before the advent of the new tax, on an annual basis they increased by 6% in February, this compares with 6.8% in England, it is noticeable that Scotland has bucked the trend seen in the rest of the UK where house price increases have slowed, north of the border they have increased markedly.
We shall have to wait and see what the effects of the new tax in Scotland has on house prices in the longer term, homes worth less than £254,000 do not pay the tax and there could well be a demand for these houses, which will inevitably mean that the price of these will rise.