Christine Campbell, regional managing director of Your Move, explains: “After a run of monthly house price stumbles on the way to the landmark referendum, the Scottish property market has recuperated. Growth regained ground during October, and property values bounced back by 0.7% (or £1,200) on average. This has returned overall annual growth in Scottish house prices to 5.7% (typically amounting to £8,850) over the past year, and property values in Scotland are making faster progress than across the North of England and Wales. Thousands of Scots are finally seeing the value of their home rebuilt from the ashes of the financial crash, with prices on average now just £717 (or 0.4%) off the May 2008 high.
Since the independence question evaporated, a new ray of confidence and certainty is radiating through the market, as normality is resumed. The feel-good factor is especially pronounced at the highest tiers of the property market, where political uncertainty froze activity most acutely. Sales of properties worth £1 million or above have more than doubled from September to October, as high-end homes begin to change hands again. In fact, October 2014 saw the biggest number of million-pound properties sold in a single month since September 2008.
But only three-quarters of the country have been flooded with price growth in the past twelve months, and in the remaining areas, property values are submerged under 2013 levels. In these places, activity is vital to keep price growth sailing along, but house sales have slipped back 1% since September. In Aberdeen City, where house prices dropped 0.5% in October, sales across the last three months are 13% lower than the same time last year. Overall, Scottish property sales in 2014 up to October are 14% higher than the same 10 months in 2013 – but this still only represents 65% of the average volume reached in the pre-recession period 2004-2007.
The Chancellor’s revamp of stamp duty should go some way to shore up demand in the short-term, and set off more movement at the lower end of the property chain. But first-time buyers have been the guiding light of the Scottish housing recovery, accounting for nearly half (46%) of current sales in the property market. For the bulk of these new buyers, stamp duty revisions won’t bring that starter home any closer within reach, as they don’t qualify for the tax at all. Typical house prices in parts of Scotland like Dundee, West Dunbartonshire and Inverclyde fall short of even the first threshold, and other support mechanisms are needed to key up confidence and ensure continued growth.”
