House prices on the rise

Rate of rise is twice that south of the Border as market catches up

HOUSE prices in Scotland have grown at twice the rate of south of the Border, adding £45 a day to the value of the average home.

New figures show the country’s property market surged in November on the back of the strongest sales since 2007, with prices up 13 per cent compared to the year before.

Estate agents say the housing market is making up lost ground on other parts of the UK, and puts the increase in activity down to the effect of the Scottish Government’s Land and Buildings Transaction Tax

Under the tax, which was introduced in April last year, house buyers pay no tax on properties valued under £145,000. However, the levy rises to 12 per cent on homes at the top end of the scale.

The survey by estate agency Your Move found that property prices had grown by 0.8 per cent between October and November, meaning the average home is now worth £169,850.

Christine Campbell, the company’s managing director in Scotland said: “The Scottish housing market has been making up for a bit of lost ground, and in the short-term is galloping ahead of the rest of Great Britain.

“This uplift provides a welcome bounce back for homeowners after a turbulent year, with house prices still below March’s record peak”

However, she warned that an increase to the amount of tax paid on buying second homes due to come into effect in April could put a brake on further growth.

Ms Campbell said: “This month’s growth spurt may be short-lived. With John Swinney’s three per cent surcharge on second home and buy-to-let property purchases coming into force, price rises could find themselves hindered.

“Investors may well be dissuaded from purchasing additional properties.”

The Your Move survey found price rises in almost all areas of Scotland, with values in East Renfrewshire up by £6,069 (5.2 per cent) since October, the fastest monthly jump on the mainland.

In Glasgow the average property rose 1.4 per cent during the same timeframe, and 7.7 per cent across the year. Edinburgh remains Scotland’s most expensive housing market, where the average property was said to be worth £240,751, an increase of 2.6 per cent on October.

However, the continuing turmoil in the oil industry is driving prices down in Aberdeen, where the value of the average home has fallen 3.2 per cent in a year.

Separate figures from the Office of National Statistics found that average house prices across the UK hit a record high of £288,000, after leaping 7.7 per cent per cent over the previous year.

Property values in England reached an all-time peak in November, increasing by 8.3 per cent to £302,000 on average.

In London, the average home is now worth £537,000. The North East continues to be the English region with the lowest average house price, at £157,000.

Faisal Choudhry, director of Scottish Research at estate agent Savills, said the Scottish market was still adjusting to the Mortgage Market Review of 2014, which tightened lending conditions.

He said: “House price growth in Scotland has been relatively slow, partly because of restrictions on lending.

“But those who can get past the tough questions and can raise a deposit can take advantage of very low rates at the moment.

“We have seen a lot of activity at the lower end of the market at the end of last year after the arrival of lower tax rates through the Land and Buildings Transaction Tax.”