First dip in house prices in eight months, despite surge in sales
- Average property prices in Scotland fall 1.0% from January – the first monthly drop seen since June 2015
- Comes despite strongest February for home sales since 2008, up 19% year-on-year after buy-to-let flurry
- But hesitation at the higher end of market before upcoming elections knocks Edinburgh off the top spot
- Midlothian the only area to break a record for property values in February, surpassing pre-crisis peak
Christine Campbell, Your Move managing director in Scotland, comments: “Scottish house prices have taken a small stumble in February, with the value of a typical home falling by 1% (£1,688) month-on-month. The sudden dip in prices will be a welcome reprieve for those attempting to get their foot on the property ladder, as this is the first decline in Scotland’s home values seen in eight months. House prices are also down compared to the same time last year, but this tells us more about the turbulence caused by the introduction of the Land and Buildings Transaction Tax (LBTT) at the beginning of 2015 than anything happening in the market right now.
“In fact, another key barometer is pointing to a lot of positivity in the market. Property sales in Scotland have flouted seasonal trends to jump 10% month-on-month, representing the highest February home sales since 2008. With a flurry of buy-to-let and second-home buyers racing to avoid higher rates of LBTT after 1st April, sales in February are up 19% yearon-year. This impetus also meant that purchase activity was concentrated at the lower end of the market – with aspiring landlords snapping up affordable options. We can see evidence of this in Edinburgh and Glasgow, where sales of flats – a popular investment choice – have soared in the three months to February 2016. But at the same time, there has been a slowdown at the top-end of the market due to uncertainty surrounding the upcoming Scottish Parliament election and EU referendum, particularly among foreign buyers. This imbalance between the volume of cheaper and more expensive property sales is skewing the overall measure of price growth, and tipping it downwards.
LSL/ Acadata - Scotland House Price Index, February 2016