Property sales in Scotland for first-time buyers and home movers are increasing three times faster than the rest of the UK - and at least one agent says it is down to the more progressive purchase tax introduced to replace stamp duty.
The switch of a Land and Buildings Transaction Tax in April has made it cheaper to buy homes at the bottom of the market - with the first LBTT threshold at £145,000, some 50 per cent of home sales in Scotland attract no LBTT at all.
With the average cost of a flat in Scotland only £134,000, flat sales have jumped eight per cent in the third quarter of this year, compared to the same period of 2014.
“Low interest rates have also fuelled the fire, as we have seen the highest number of people taking out mortgages over the last two quarters since 2007. Overall, this is the strongest October for sales since 2007, with 9,416 sales across the month – a 10 per cent rise year-on-year” says Christine Campbell, managing director of Your Move in Scotland.
Even at the top end of the market - where LBTT is higher than the old stamp duty - there are strong sales.
“Throughout Scotland as a whole, there have been twice as many sales of homes worth more than £1m between August and October, with 30 sales compared to just 14 in the three month period before. The top of the market now appears to be recovering after being initially scolded by the steeper LBTT” says Campbell.
“Higher-end sellers are having to reduce the prices of their homes in order to compensate for the increased LBTT tax rate. In Edinburgh, sales of detached homes in Q3 2015 are up three per cent year-on-year, but average prices for these properties have dropped two per cent over the same period” she claims.
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