Scots housing sales reach seven-year high

HOUSING sales reached a seven-year high in July, driven by “highly competitive” mortgage rates and lower stamp duty levels, according to a new report.

Sales in July rose by 6% on June levels and were up 5% on the previous year. Picture: Alex Hewitt

Sales in the month rose by 6 per cent on June levels and were up 5 per cent on the previous year, the Your Move/Acadata House Price Index for July showed.

However, average property prices were 0.1 per cent down on a year ago, to an average of £165,162.

Housing experts attributed the decrease to a drop in top-end home sales across Scotland due to the steeper transaction costs now incurred for more expensive properties following the introduction of the new land and buildings transaction tax (LBTT) in April.

The report showed there were 9,775 housing transactions in July.

Christine Campbell, Your Move managing director in Scotland, said: “Scottish property sales hit a seven-year pinnacle in July, recording the highest number of home purchases during a single month since July 2008.

“Activity has been picking up speed in recent months and sales volumes climbed 6 per cent month-on-month to reach 9,775 in July.

“Lower stamp duty for purchases below £325,000 under the LBTT first got the ball moving in April.

“Since then, the conclusion of the general election, supply of new-build homes and the favourable mortgage rate environment have only added to this momentum.”

Meanwhile, the proportion of homes in Scotland sold for more than £325,000 has fallen from 9.2 per cent of all property sales in July 2014 to 7.8 per cent a year later under the revised taxation system.

The first-time buyer market is also helping to drive the market, feeding off a “flurry” of new-build housing which reached 17,149 units in 2014/15, the highest level since 2010/11, the report said.

Glasgow saw the biggest rise in new homes built in the past year, followed by Aberdeenshire and Edinburgh.

Property experts said the 0.1 per cent annual drop is likely to be a “short-term symptom”, with growth starting to shore up.

On a monthly basis, property values saw a 0.4 per cent increase in July, with more expensive areas starting to see price growth return, following the immediate stagnation in the aftermath of the introduction of the LBTT.

On the mainland, Edinburgh saw the biggest boost in prices during the month, up 3.7 per cent since June, while East Ayrshire saw the largest fall, down 4.8 per cent.

Commenting on the report for July, John Tindale, senior housing analyst for Acadata, said: “The main factors influencing the growth in transactions this month were the highly competitive mortgage rates on offer and the improving prospects for both employment and growth in the economy, along with the outcome of the UK general election which many had feared might end with a hung parliament.”