The number of residential property sales in Scotland rose 4.9% in the first quarter of 2016 / 17 (April-June), compared to the same period last year, according to official statistics just published by the Registers of Scotland. A total of 25,760 properties changed hands in this period, the highest number of sales for this period since 2008/09.
This is also a massive increase on January-March 2016, where only 19,605 properties were sold, being a 31.4% increase.
Whilst it is always encouraging to see increasing numbers, it is more than likely that this increase is a result of changes in Land and Buildings Transaction Tax, which came into effect on 1 April 2016 for additional dwellings, e.g. buy-to-let properties. With effect from 1 April 2016, the purchase of an “Additional Dwelling” attracts a 3% tax charge, based upon the whole price of the property, and as a result there were a large number of transactions which completed in March in advance of this, to understandably avoid this surcharge.
It is likely that a considerable number of these transactions completed in the last week of March, and as a result they would not have reached the Registers of Scotland until April, which I suspect has somewhat distorted the figures.
This increase in numbers was even greater in the Highlands, with a total of 1,124 properties being transferred during April-June 2016, a 14.8% increase over the same period last year.
Unfortunately, whilst there has been an increase in volumes, the value of residential property prices in the last quarter has fallen. The overall value of a residential property in Scotland has fallen by 2.3% on the same period last year, and the average price is £164,326. However, the average price in the Highlands remains £165,393, and so remains above the national average.
It will be interesting to note the following quarter’s figures where these are released in October, to see if there is a levelling off of the number of sales and what effect the recent tax changes and other uncertainties will have on property values.