Scotland’s residential market 'continues to recover'
Scotland’s prime residential market demonstrated a steady recovery during 2014, experiencing an upswing in values and transaction levels, as well as a 20 per cent rise in million pound sales, according to Savills.The global real estate services provider believes the recent changes made to Stamp Duty are motivating buyers and sellers of Scottish property to complete transactions by April 1st, as after this date the new Land and Buildings Transaction Tax (LBTT) rates will come into effect, which will penalise buyers of mid-market properties and upwards.However, Savills has also pointed out that there is a lack of available prime stock to meet the demand in some areas of the city regarded as hot spots, causing the rate of sales growth to slow, but keeping prices robust.Since the referendum, there has been a 20 per cent annual increase in million pound sales of Scottish property and a 43 per cent boost in buyer interest across the prime market, which describes property valued at £400,000 and above, compared to six per cent last year.In the run-up to the referendum, the market experienced a slow down, but this was quickly followed by a marked upswing in activity, as both buyers and sellers became motivated to make a deal before the LBTT. Following double-digit growth in the previous four quarters - averaging at 23 per cent - there have been signs that the rate of growth in mortgage dependent-mainstream Scottish housing market is beginning to level off.In this market, growth was restricted to nine per cent during the third quarter of 2014, while mortgage approvals for the UK dropped nine per cent in September - the first annual fall since January 2013. Savills attributes this to the Mortgage Market Review that began in April 2014, resulting in tighter affordability checks.Savills has forecast that LLBT rates will impact prime residential values across Scotland, resulting in a flat market until 2016, by which time it expects the market to adjust to the new tax regime.
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