Scottish property market remains “comparatively good value for money” for high-end property investors

The estate agent said that Scottish property has continued to attract buyers across key sectors of residential property as well as rural and commercial markets with Scotland remaining “comparatively good value for money”.

Savill’s Faisal Choudhry said: “The introduction of LBTT (Land and Buildings Transaction Tax) has particularly impacted the residential market. The replacement to SDLT, which was introduced on 1 April 2015, has contributed to the growth of Scotland’s mainstream residential market, but delayed the recovery of the prime sector in the medium term. “Edinburgh is the exception to the rule, where the prime market is attracting buyers from London and overseas who remain cautious about investing outside the capital.

“One year on from the Referendum on Scottish Independence, there has been a notable transfer in balance within the residential property market north of the border, with a shift to bottom up growth.

“During the summer of 2014, the Scottish property market was recovering from the economic downturn. The prime residential market was leading the way in the resurgence, with a growing demand for properties above £400,000, particularly in key property hotspots. Consumer confidence was beginning to ripple out, both to other locations and to lower price bands.

“However, the Referendum raised a number of difficult questions, and the resulting uncertainty stalled the property market. This was felt acutely at the top end, the bracket that had long been boosted by the prevalence of London buyers. A year on, this key target group remains anxious about LBTT and the forthcoming Scottish Rate of Income Tax.

Sales of £400,000+ homes have dropped by 31 per cent from 925 to 639, mainly due to a sharp fall in activity above £750,000 from 117 to just 46.

Mr Choudhry added: “Both UK and Scottish Governments have introduced initiatives to support the lower value sector of the market in an attempt to revive both the house building industry and buyers on the early steps of the property ladder. Buyers of homes below £400,000 are now receiving further assistance in the form of favourable rates of LBTT. Meanwhile, buyers of more expensive homes are taking on the burden of the new progressive taxation in Scotland.”