Scottish house prices rise at ‘highest rate since 2007’

The ONS said average prices climbed by 14.6 per cent over the year to March, to hit £207,000, the largest increase since 2007.

The data compared with a rise of 9.4 per cent in England, 7.5 per cent in Northern Ireland and 5.7 per cent in Wales.

As of March, the average UK house price now stands at £273,000.

The ONS house price index also that found the number of mortgages for house sales in Scotland increased by about 50 per cent between February and March this year.

It said that homes costing more than £500,000 accounted for a “significant proportion” of the increase in sales.

The ONS report added: “These factors, along with a relatively small annual increase in Scotland prices of 0.8 per cent in March 2014, have led to the price index for Scotland increasing by 14.6 per cent when compared to a year earlier.

“It should also be noted that the Land and Buildings Transaction Tax replaced UK stamp duty land tax in Scotland from 1 April 2015, which may have had an impact on the increase in prices.”

Meanwhile, the Your Move/Acadata Scotland House Price Index has also reported a strong rise in Scottish house prices, led by Edinburgh and East Lothian, of 11.2 per cent over the past 12 months.

It also revealed a sharp rise in transactions, which were up 29 per cent between February and March this year, driven by looming new Land & Buildings Transaction Tax (LBTT).

Estate agents Rettie & Co said the rising property prices north of the border have been driven by a surge in prime property sales prior to the introduction of the new tax rules that have “skewed the market” as higher value property sales were been brought forward to ‘beat’ the LBTT, which was introduced in April.

Rettie said it expects the high-end market numbers to drop back later in the year, along with lower-priced houses, as the market adjusts to the new tax.

However, with a gap of up to 3 months in sales being achieved and sales being registered, Rettie has also projected registered £1m plus sales for April and May to be even higher than March.

The estate agent, which sold 21 £1m plus properties in March alone across the country, says that sharp house price rises are therefore likely to be recorded for Scotland over the next two months.

Managing director, Simon Rettie, said: “The start of 2015 has been very strong for our Sales Teams focusing on the prime market. This was partly driven by the introduction of LBTT on 1st April 2015 and the front-loading of the market. It is also likely to be as a result of a post referendum recovery and improving consumer sentiment. We have seen slowdown in this market post-April as buyers at the top of the market take stock of the higher LBTT rates.”

John Boyle, Rettie’s director of research, added: “The Scottish prime housing market is emerging from a very challenging few years. What we are seeing in terms of house price rises is partly a skewing effect of LBTT and the market should now settle down, particularly as there is less political uncertainty following the UK General Election.”