LBTT effect shows in latest ESPC sales data

The impact of the change in property transaction taxes in Scotland has been reflected in the latest quarterly price information from Edinburgh Solicitors Property Centre.

Figures for the quarter from April to June 2015 show that average property prices in east central Scotland fell by half a percentage point compared with the same period last year, in contrast to the 18% leap for the quarter from January to March.

April saw the introduction of land and buildings transaction tax in place of stamp duty land tax. The new tax exempted more properties at the lower end of the price range or charged tax at lower rates, while properties selling at more than about £330,000 attracted progressively higher bills. This led to a surge in sales of higher value properties ahead of the 1 April deadline, and ESPC confirm that fewer properties over £300,000 are now being sold, driving down average prices.

If prices for the first six months of 2015 are compared with the same period in 2014, the area has seen an increase of 9%.

Fewer homes are being brought to market, with a decrease of 5.6% compared with last year, yet the total number of sales has risen by 6.9%. Homes are increasingly achieving their home report valuation, with 58.7% reaching their valuation, compared with 56.7% at the same time last year. Average times to sell a property show little change.

Maria Botha-Lopez, business analyst for ESPC said: “A surge in average property prices in the first quarter was driven by larger volumes of high-end property sales, and now we are seeing a decrease in average property price driven by smaller volumes of high-end property sales in the second quarter.

“By comparing the first six months of this year against the same period last year we see a 9% growth in average property prices, which looks like we have a better chance of balancing out the waxing and waning of the LBTT effect on property prices. It will be interesting to see whether this effect will taper out in the coming months.”

• ESPC is reporting positive results from the first test phase of its new e-conveyancing service, "Central Conveyancing". The system aims to streamline up the conveyancing process by creating a case record as soon as a property is marketed, with all interested parties having access as soon as a buyer is found. Further testing will now take place involving more users, and it is hoped that a fully-developed platform will be available nationally in the near future.