£1 million plus sales in Scotland increase post Referendum

The number of £1m+ residential property sales in Scotland rose by 9% quarter on quarter in the final three months of last year according to Knight Frank’s analysis of official data.

The figures show that the number of £1m+ sales increased as the year progressed, with a sharp jump in sales during the second half. In fact, 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, £1m+ 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 (13%) and Fife (11%). Over the full 12 months of the year, Edinburgh accounted for 48% of all £1m+ residential sales in Scotland, followed by Aberdeen City (17%).

Oliver Knight, Knight Frank Residential Research, said:

“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 Referendum. After months of doubt about the outcome, buyers felt more secure about making a decision to move house or purchase a property.

“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 £1m will pay nearly £35,000 more in purchase taxes.

“We expect that the extra impetus for buyers of property valued above £1m 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.”

Ran Morgan, Head of Scotland Residential at Knight Frank, said:

“As evidenced by the jump in high valued property sales during the second half of the year the appetite for prime property certainly in Scotland’s 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. Of course there is likely to be a period of time while the market adjusts but we expect the market will be able to absorb the tax change in the long-run. Ultimately, Scottish property remains good value for money.”