Scottish property market ends 'rollercoaster' 2021 with better-than-expected growth
Scotland’s property market endured a “rollercoaster ride” over the past 12 months, but growth has been better than expected, according to one of the sector’s leading players.
DJ Alexander, which now forms part of letting and estate agency group Lomond following this week’s merger deal, believes that the property market - spanning homebuyers, tenants, landlords and investors - has had a stronger period of growth this year than many could have hoped for.
The Edinburgh-based firm said the housing market has proved to be “extraordinarily robust” with some parts of Scotland, such as the Scottish capital, experiencing areas of double-digit sales growth and prices which “even the most optimistic estate agent would have struggled to predict”.
Demand has outstripped supply and been maintained throughout the year even when the lower land and buildings transaction tax (LBTT) relief ended in March, indicating that the reduced tax liability was not the primary driver of the housing market.
According to the latest LBTT statistics, which cover the period up to November, the value of revenues from residential sales for the Scottish Government increased by 92.4 per cent year on year. Taxes collected increased by £178 million, from £192.7m in 2020 to £370.7m in the 11 months to November 2021.
The results for those paying the additional dwelling supplement (ADS), which includes landlords, property investors, and second homeowners, increased by 79.2 per cent over the same period, rising by £66.9m, from £84.5m in 2020 to £151.4m by last month.
David Alexander, chief executive of DJ Alexander Scotland, said: “The last year has been both surprising and remarkable. Nobody believed that the residential market would continue to be so buoyant during a time when many people must have had very real concerns about their future employment and income. Yet we have seen record house price rises and surging demand.
“The latest LBTT statistics show just how great that demand has been. The last six months (June to November) of revenue raised have been the highest ever recorded since the tax was introduced. This reveals the scale, degree, and character of this property boom.”
He added: “That these record numbers are also reflected in the statistics for those paying the additional dwelling supplement indicates that it is not just homeowners who see Scotland as a great place to buy.
“Landlords, investors and second homeowners have contributed £94m to the government’s coffers in the last six months alone with the highest ever single month figure of £19m being raised in November.
“What this tells us is that property has been, and continues to be, one of the vital elements of the pandemic.
“People needed to have a place to stay that was important to them and contributed to their wellbeing. It was as if people suddenly remembered that there are few things more important than where you live.”
On Monday, it emerged that Lomond Group was acquiring DJ Alexander, one of the industry’s most familiar names, for an undisclosed sum. The move was supported by Lomond’s private equity partner LDC, the private equity arm of Lloyds Banking Group.
A message from the Editor:
Thank you for reading this article. We’re more reliant on your support than ever as the shift in consumer habits brought about by coronavirus impacts our advertisers. If you haven’t already, please consider supporting our trusted, fact-checked journalism by taking out a digital subscription: www.scotsman.com/subscriptions
Want to join the conversation? Please or to comment on this article.