Demand for prime Scottish country houses picks up but tax continues to limit growth
The prime market continues to be constrained by LBTT, but there are encouraging signs that activity is picking up.
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Prime country house prices in Scotland were unchanged over the first three months of 2017, according to the latest research from Knight Frank. On an annual basis, however, prices fell slightly, dropping by 1.2%.
The top end of the market in Scotland continues to adjust to higher rates of property taxation with Land and Buildings Transaction Tax (LBTT) subduing activity.
But while higher taxes have acted as a constraint on the prime market, there are signs that confidence is strengthening. Knight Frank figures show an 11% increase in the volume of new buyer enquiries over the year to March 2017 compared with the same period a year previously. Viewings were 32% higher over the same timeframe.
Indeed, Ran Morgan, Head of Scotland Residential Sales, noted that there is a feeling of “cautious optimism among buyers so far this year.
“Properties within commuting distance of city hubs continue to generate a good level of interest from both local buyers and those looking to upsize or downsize from south of the border, particularly if they have been priced competitively,” Ran said.
This has not, however, been matched on the supply side, with 10% fewer properties for sale with a value above £750,000 at the end of March compared with the same time in 2016 and 7% fewer than in 2015.
Meanwhile, the introduction of the 3% Additional Dwelling Supplement (ADS) in April 2016 has served to make buyers even more price conscious. Statistics from Revenue Scotland reveal that over 19,000 transactions have been liable for ADS since its implementation, contributing over £80 million towards total LBTT receipts.
Read the full Prime Scottish Country House Index.