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Scotland sees 9% quarterly rise in £1 million plus properties
The number of £1 million plus residential property sales in Scotland rose by 9% quarter on quarter in the final three months of last year according to a new analysis. A report from Knight Frank based on official data shows that the number of sales in this sector increased as the year progressed, with a sharp jump in sales during the second half of the year. Indeed, the total number of sales completed in the final three months of 2014 was 88% higher than the period between April and June and more than double the number recorded over the opening three months of the year. During the final quarter of 2014, £1 million plus sales took place in 11 different local authorities, led by Edinburgh, which accounted for 47% of the total sales over the three month period. This was followed by East Dunbartonshire with 13% and Fife with 11% while over the full 12 months of the year, Edinburgh accounted for 48% of all £1 million plus residential sales in Scotland, followed by Aberdeen City at 17%. According to Oliver Knight, of Knight Frank residential research team, the rise in high value property sales last year can be attributed to two factors, both of which have played a key part in boosting transaction volumes at this level of the market. Firstly, the market has responded to the certainty provided by the result of the independence referendum. ‘After months of doubt about the outcome, buyers felt more secure about making a decision to move house or purchase a property,’ he explained. Secondly, the announcement of the proposed Land and Building Transaction Tax (LBTT) rates in October shed light on how purchase taxes would rise in April 2015, especially for more expensive properties. ‘Buyers now have a window when purchase costs are lower, especially given the changes made to stamp duty at the Autumn Statement in December, and many are taking advantage. From April this year, when the new LBTT rules come into force, a buyer of a property valued at £1 million will pay nearly £35,000 more in purchase taxes,’ said Knight. ‘We expect that the extra impetus for buyers of property valued above £1 million to complete sales before the new LBTT levy comes into force in April will mean the number of high value property sales continues to rise for several months. Even with the new higher purchase taxes, the relative cost of property in Scotland compared to London and the South of England means there is still a large effective discount for buyers making the move north,’ he added. Ran Morgan, head of Scotland residential at Knight Frank, pointed out that the appetite for prime property, certainly in Scottish cities, remains high. Edinburgh continues to lead the way with the highest number of sales, followed by Aberdeen. ‘Despite forthcoming higher levels of tax, Scotland still offers excellent value compared with London and the south. Because of this we expect the… Continue reading
More UK homes selling for less than asking price, new research shows
Nearly three quarters of houses sold in the UK in January went for less than their asking price as buyers started to negotiate again, according to estate agents. Overall the housing market is cooling down in the lead up to the general election in May with supply and demand both down from levels seen throughout 2014, the report from the National Association of Estate Agents (NAEA) also shows. NAEA member agents found that 73% of homes were sold for less than asking price in January, 17% more than the same period last year when 56% homes were sold for less than originally priced, suggesting that power is returning to the buyers’ hands and they’re in a better position to negotiate. Room for negotiation may have given the help the housing market needed, as an average of eight houses were sold per branch in January, compared to the seasonally low five in December. ‘The Autumn Statement’s stamp duty reforms have already created movement. Following this, sellers may have hiked up prices to take advantage of buyers’ increased budgets,’ said Mark Hayward, NAEA managing director. ‘But it seems buyers are counter-acting this by negotiating prices back down to original asking price opposed to paying over the odds for their dream home, creating a real buyers’ market,’ he explained. ‘Hopefully further reforms around the general election will help to balance the deficit in supply and demand but only time will tell,’ he added. The report points out that supply and demand were both down at the start of the year, indicating that the market is cooling off. Supply was down to 44 properties available per member branch, compared to an average 47 for the whole year in 2014 and 45 in December. Demand saw a 2% jump too, with the number of potential buyers registered per branch falling from 360 in December to 353 in January. ‘The housing market is based solely on sentiment and so if consumers feel an ounce of uncertainty and this will result in a temporary lull. With the general election on its way, we’re starting to see the different political parties stowing up policies around housing, which is undoubtedly causing uncertainty in the property market,’ Hayward concluded. Continue reading
Weaker demand from overseas buyers hits London prime property market
Prime property prices in London fell by 4.3% in the last quarter of 2014 due to weaker demand from international buyers, a new analysis suggests. This weaker demand is driven by actual and potential tax changes as well as shifts in the relative value of the exchange rate, according to the report from residential data firm Hometrack. It points out that overseas buyers of prime central London property saw capital values rise by 80% over the last five years. The drop in the value of sterling between 2007and 2009, combined with a 17% fall in property prices made London look very good value to overseas buyers with extremely strong demand in 2009 and 2010. Changes in currencies have delivered even stronger gains, it explains. Russian buyers have seen the biggest gains on the weakness in the rouble in the last six months. However, rouble backed buyers who do not already own London property will now find it much more expensive to buy which looks set to impact demand and pricing levels with a drop in prime London prices in the last quarter of 2014. On top of this overseas buyers in this sector now face paying more in property tax due to changes announced at the end of last year to UK stamp duty levels. Talk of a mansion tax being introduced after May’s general election is also affecting the market. But the report also points out that prices in this sector have climbed much faster than other markets with the London region as a whole seeing prices rise by 59% in the last five years compared with prime London’s 80% and the UK as a whole just 34%. ‘While prime London property prices have grown by 80% in the last six years, changes in currencies can boost the gains for overseas buyers,’ said Richard Donnell, director of research at Hometrack. ‘This is good news for those overseas buyers who already own property but it can make London look less affordable for those who do not own housing. Fluctuations in currencies together with tax changes and the threat of a mansion tax are cooling demand for prime London housing and values have started to slip back as result,’ he added. Continue reading
