Scots house sales surge as buy-to-let investors rush to avoid new tax

The number of properties sold in Scotland rocketed by 18.2 per cent in the final quarter of this financial year, returning to levels not seen since before the recession.

Houses were being snapped up ahead of tax deadline. Picture: John Devlin

Official figures from Registers of Scotland (RoS) showed that 19,802 properties changed hands between January and March, the highest volume of sales for these months since the 2007-08 financial year.

But experts warned that the increase could be due to a flurry of buyers keen to snap up second homes and buy to let properties before the introduction of the second home tax on 1 April.

The figures come just weeks after property experts warned that parts of Scotland were experiencing a crisis in the demand and supply of properties on the market.

Estate agents warned that prices could rocket as the number of homes coming up for sale continued to fall behind the number of house hunters in the market.

The total value of sales across Scotland increased by 8.3 per cent compared to the previous year to just over £3.15 billion. Edinburgh recorded the largest market, with sales of over £554.6 million for the quarter, up 3.3 per cent.

Midlothian recorded the highest increase in value, with sales of over £63m, an increase of 56.5 per cent compared with the same quarter last year.

Meanwhile, Aberdeen City, hit by the crisis in the oil industry, showed the largest decrease in market value, down 22.7 per cent to £162.7m.

Kenny Crawford, RoS director of commercial services, said: “We’ve seen a sustained increase in the volume of sales throughout the 2015-16 financial year. While volumes are up this quarter, prices are down by 8.4 per cent compared to the previous year, bringing the average price to £159,198.

“This time last year, we saw a spike in house prices, with an increase in the number of high value property sales.

“This year has seen an increase in the volume of lower value properties being sold, which may account for this year’s lower average price. ”

East Renfrewshire recorded the highest average property price at £222,303, down 7.9 per cent on last year. The largest percentage rise was seen in North Lanarkshire, where the average property price rose 6.6 per cent to £116,738. The largest fall was in East Lothian, with an average price of £207,276, a fall of 16.5 per cent on last year.

All property types showed an increase in sales volumes, with flats showing the biggest increase at 24.2 per cent. They also all showed a decrease in average price this quarter, with detached properties showing the biggest decrease, down 11.6 per cent to £236,249. Semi-detached, terraced, and flatted properties decreased by 8.5 per cent, 10.5 per cent, and 7.4 per cent respectively.

Orlaith Brogan, of Solicitors Property Centres Scotland, said: “An increase in sales volumes over the last three months could be attributed in part to the rush to purchase a property before the second homes tax came into place on 1 April.

“We are still seeing issues with supply and demand, particularly in Fife and Glasgow, where the number of properties available cannot keep up with demand.”