In what would have been an unimaginable trend just a year ago, house prices are now rising faster in Scotland than in London.
LSL Property Services says house pricess across Scotland have risen 11.2 per cent in the past year - a trend which confirms figures earlier this week from the Office of National Statistics suggesting a similar rise .
The number of transactions in March in Scotland rose 29 per cent according to LSL.
“In part this is due to a short-term scramble to avoid the new Land and Buildings Transaction Tax put in force by the Scottish government on April 1. For the top of the market especially, a pre-deadline rush has boosted the average price paid in March, so the latest surge in prices is unlikely to be sustained to quite the same extent in April under the new regime” says LSL spokeswoman Christine Campbell.
“Yet even before the one-off effect of looming tax changes, Scottish house prices were rising on an annual basis by 6.0 per cent in February, already on a par with 6.8 per cent south of the border. As prices cool across the rest of Britain, Scotland has seen the opposite trend, with prices accelerating upwards” she says.
Buyers paying less than £254,000 will have to pay less LBTT tax than under the old stamp duty system. “But it remains to be seen if this will be quickly countered by higher prices for these properties, as buyers with a little more buying capacity just bid up the average price for these homes” says Campbell.
“This is not a normal market and there will be a comparable bump on the other side, as the new tax takes hold” she warns.
Meanwhile John Boyle, research director of high-end Scottish agent Rettie & Co - which saw a surge in £1m-plus sales ahead of LBTT being introduced - says: “The Scottish prime housing market is emerging from a very challenging few years. What we are seeing in terms of house price rises is partly a skewing effect of LBTT and the market should now settle down.”