What next for the Scottish housing market?
Last month’s referendum on Scottish Independence was a hot topic of conversation across Scotland and was certainly a consideration for those thinking of moving home. In the weeks leading up to the vote we heard an increasing number of questions from buyers and sellers alike about what each outcome would mean for the local property market.
In the days immediately prior to the referendum we saw a slight dip in the number of homes coming onto the market and there were even reports of some buyers making offers that were contingent on the outcome of the vote.
What happens now?
With the votes counted and the result announced, attention now inevitably turns to what the future holds for the market. There are still some notable changes coming in the not too distant future which would be implemented irrespective of the outcome of the referendum, as many decisions which directly affect the Scottish housing market are already devolved to Holyrood or set at a local council level.
The replacement of Stamp Duty
Prior to the referendum it was decided that Stamp Duty - the tax paid on land and property sales over £125,000 - would be replaced by the new Land and Buildings Transaction Tax (LBTT). The main aim of the change is to move away from the slab structure of Stamp Duty, where the entire selling price is taxed at the same rate, towards a progressive tax system. The existing Stamp Duty bands mean that a difference in selling price of just a few pounds can lead to thousands of pounds of additional tax paid and the new system should help remove these inequalities in the market.
Home building levels
One of the major issues facing the property market in Scotland is the need to ensure house building levels are sufficient to keep pace with demand in the years ahead. With more of us living longer and an increasing number of single person homes, the number of households across East Central Scotland is projected to grow substantially over the next decade. Local councils face significant challenges in ensuring not only that the right number and types of properties are built, but also that these are supported by the necessary amenities such as schools, libraries and parks.
Whilst there was some disruption to volumes in the days immediately prior to the referendum, this was short term in nature and we certainly don’t expect to see a sudden surge of activity from buyers or sellers as we head into the final quarter of 2014. The market has been steadily improving over the last 12 months with selling times falling and the number of homes achieving Home Report valuation rising. Market conditions this year have been more favourable for sellers than at any stage over the last five years and we would expect to see this pattern of steady improvement continue into 2015.
Find out more about local house prices in our monthly House Price Reports.