House prices rose as tax holiday was about to end

A SURGE of first-time buyers nudged the average house price up in March, during a rush to beat the stamp duty deadline, according to a report.

The average cost of a house in Scotland stood at £146,633 that month, up slightly from £145,841 in February.

However, the number of housing transactions shot up 21 per cent from February, sparked by first-time buyers eager to get on the property ladder before the stamp-duty holiday ended, analysts said. As of 24 March, first-timers buying homes worth between £125,000 and £250,000 were no longer exempt from paying the 1 per cent tax.

The increased activity in March was a “one-off” and levels are expected to fall back in early summer. Experts put this down to banks and building societies reducing lending to borrowers who have low deposits.

Despite the overall rise in average price, the figure was 1.2 per cent lower compared with the same point last year.

The findings, contained in the latest LSL/Acad Scotland House Price Index, show house prices in only 15 of Scotland’s 32 council areas increased over the year. Aberdeenshire prices rose 6.9 per cent and West Dunbartonshire prices were up 18.8 per cent.

Gordon Fowlis, regional managing director of estate agency Your Move, part of LSL, said: “The end of the stamp-duty holiday for new buyers sparked a glut of last-minute activity from first-timers rushing to beat the deadline, and so prices rose for the second successive month as a result.

“That so many first-time buyers were able to piece together a deposit in a downturn is testament to the strong underlying demand from buyers desperate to get onto the property ladder.”