Whilst business in the vast majority of sectors and industries has slowed, the housing market in the UK has really bucked the trend, registering a steady increase in house prices across England, Scotland, Wales and Northern Ireland.
According to the ONS, average house prices in the UK increased by 8.5% in December in 2020.
Average house prices in Scotland rose to £163,000, representing an increase of 8.4%.
House prices in East Ayrshire were up by 17.9% whereas Renfrewshire, East Renfrewshire, Borders and Stirling also saw increases of more than 10%.
We provide home reports in Edinburgh, where houses recorded a more subdued 5.3% growth, whereas property in Aberdeen continues to fall in value.
Overall, though, this is a very healthy-looking picture for home buyers and indeed home sellers. The low cost of borrowing combined with the increased threshold of the Land and Buildings Transaction Tax has spurred on transactions in the housing market.
Land and Buildings Transaction Tax
In 2020, the Scottish Government announced that they would increase the LBBT threshold in line with UK Chancellor Rishi Sunak’s announcement to increase the stamp duty threshold.
The threshold was increased from £145,000 to £250,000 and this combined with the wide availability of 90% loan-to-value mortgages has kept the Scottish housing market buoyant over winter. The trend is only expected to continue through 2021 and could be accelerated by the further easing of lockdowns.
Kate Forbes, who announced the LBBT threshold change, said that some 80% of Scottish housing transactions would be exempt from LBBT whilst the extension remained and the remainder would save some £2,100 on average. There is considerable pressure on the government to extend the deadline beyond the 31st March current deadline.
The decrease in LBBT tax has enabled sellers to more readily afford the other costs associated with selling a home in Scotland, such as a Home Report, which must be supplied within 9 days of a buyer’s request.
Behavioural Changes in Home Buyers
The pandemic has motivated people to look at where they’re living and why, with many looking for a fresh start away from cities.
Mike Scott, the Chief Analyst at estate agency Yopa said “during the second half of the year, we expect that many people will be looking for a fresh start of some kind, or at least for a new home.”
Meanwhile, migration to Scotland has also increased from 2019 with the BBC reporting a 30,000 net population increase in 2019 from migration. This could reflect attitudes towards Brexit or the relatively lower house prices in most of Scotland compared to the UK average.
Moreover, under lockdown and throughout the coronavirus pandemic, there has been a tremendous appetite for relocation and upsizing as people look for larger houses with more room. Rural and countryside living is also on the rise and Savills reported that property searches in Shetland and Inverness grew significantly over 2020.
This represents an uptick in demand for rural living – it’s perhaps unsurprising that Scotland is one of the main benefactors of this demand.
This is a perfect storm of factors for the Scottish property market and has helped increase demand and house prices.
The market of potential buyers for Scottish homes are greater and it’s possible to sell your home quicker than at any time since 2014.
The Housing Market Keeps Moving
Under lockdown and in the early stages of 2021, where restrictions are being lifted, the housing market has kept moving. Estate agents have still been able to lead viewings, Home Reports and surveys are also accessible to sellers.
By prepping your home with a Home Report, you’ll be in the best position to take control of your home sale and take advantage of rising Scottish house prices.
Selling Your Home in Scotland
The current market is quick in regards to getting a home onto the market and sold, and house prices are favourable for both buying and selling, hence why transactions have increased across the boards.
Now is an excellent time to consider selling your home in Scotland. You might be looking to relocate, or even migrate. Like many others, you might be looking to move into rural Scotland or could be searching for a home with more space and room, possibly with a home office or other similar features.
It’s likely that the housing market will keep moving at a pace throughout 2021 and it’s shaping as an excellent year to consider selling or buying property in Scotland.