Musselburgh sees rise in flat sales ahead of second homes tax

According to the latest analysis from estate agents ESPC, figures which cover the period from December 2015 to February 2016, reveal that sales of two bedroom flats in Musselburgh are up by 73.3 per cent compared with the same period last year, making them the most popular type of property to be bought, with one bedroom flats a close second.

ESPC said the trend could be attributed to increased demand on potential buy-to-let properties ahead of the new supplementary tax on second homes, which is to be introduced on 1st April.

Musselburgh is in the top three of areas with most sales under £325K across east central Scotland, after Dunfermline and Leith, in Edinburgh, which also saw demand for flats increase over the last three months.

With an average price of £118,485 for one and two bedroom flats, Musselburgh is favourable when compared with the average price of one and two bedroom flats in Edinburgh of £170,564, which could explain its popularity, coupled with good amenities and transport links.

In East Lothian, average property prices have decreased by 8.8 per cent, with a 3.6 per cent drop across east central Scotland when compared with the same period a year before, and the number of new homes brought to market between the months of December and February have decreased by 8.7 per cent annually.

ESPC noted that the latest data means comparing the number of new listings with the same period last year when the LBTT tax change was announced, and sellers decided to bring their properties on to the market meeting buyer demand for purchasing homes prior to the effective date of the new tax rates. This is coupled with the trend seen last year of less homes coming to market when compared with previous periods.

The market at present is still very much in favour of the seller with less properties marketed meaning faster selling times. In East Lothian homes are selling faster with time to sell down by 25.8 per cent, from 82 days down to 61, although this is a longer than average time when compared with an east central Scotland average of 38 days. 50.5 per cent of East Lothian homes are achieving their home report valuation, compared to a 57.4 per cent average for east central Scotland.

Maria Botha-Lopez of EPSC said: “The higher increases in property prices for one and two bedroom flats in Musselburgh could be attributed to increased demand ahead of the 1stApril implementation of a 3 per cent LBTT supplement on second homes or additional dwellings.

This is also the type of property sought after by first time buyers looking for an affordable option to get on the property ladder. The short term effect of this LBTT supplement, which aims to strengthen the first time buyer’s position in the market, has instead increased in average selling prices for those types of properties.

“Future house price reports will show whether this is a temporary effect on demand and prices leading up to the 1st April effective date, or if growth in prices cools off after the implementation.

“While we are seeing an overall decrease in average selling prices over the last three months, it is worth bearing in the mind that average prices in the first quarter of 2015 were driven up by larger than normal volumes of high-end properties selling before the implementation of LBTT in April last year. The average selling price across east central Scotland has increased by 10.5 per cent when compared with the same period of the prior year (December 2013 to February 2014).”