Scottish property prices are rising at their fastest rate in three years, according to a new study.
The Property Monitor report shows the fifth consecutive quarter of growth and the seven per cent rise between January and March this year is the biggest jump in prices since the first quarter of 2015.
The number of property transactions fell by 4.9 per cent as the ‘Beast from the East’ brought many parts of the country to a standstill in late February. However, the freezing conditions did little to cool the market in East Renfrewshire, which has now spent an entire calendar year as the most expensive place to live in Scotland.
The region’s average sale price of £264,840 is a new record for Scotland and up 17.1 per cent on the same time last year. Edinburgh also reached a record high after a 10.3 per cent rise and Glasgow saw a 10 per cent increase.
Against that, however, Dundee, Stirling and Aberdeen all saw prices fall. The average sale price in Aberdeen – which once vied with Edinburgh as Scotland’s most prosperous market – today sits at £190,686, just 14.8 per cent above the Scottish average and almost £71,000 behind the capital.
Jacqueline Law, managing partner at Aberdein Considine, which carried out the research, said the sudden rise in average prices can be attributed to the effect of the bedding in of the Land and Building Transaction Tax (LBTT) and a lack of housing stock on the market.
She said: “Firstly, we have seen an increase in sales around the £750,000 bracket as the new LBTT regime introduced by the SNP three years ago is finally accepted by buyers of prime properties. With major concerns being raised about the upper bands, many purchasers were sitting tight.
“These buyers appear to have accepted that change is now unlikely and decided to make their move.”
She added: “The second factor is a lack of stock coming to market in certain regions, particularly in and around Glasgow and Edinburgh.
“The average sale price of £264,840 seen in East Renfrewshire during the most recent quarter is the highest we’ve recorded – but the number of sales in the area has actually fallen. This is a pattern we are seeing repeated across many parts of the country where demand is outstripping supply.”
The research reveals concerns about the Scottish Government’s second home levy, with 61 per cent of those polled saying the additional tax has put them off investing in a second property.
The tax, brought in by the then Finance Secretary John Swinney in 2016, charges an additional three per cent levy on buy-to-let properties worth more than £40,000, on top of any other LBTT tax due. The changes added an additional £6,000 tax to the purchase of a £200,000 second property.