House prices all across Scotland have rocketed up at more than twice the rate of English homes in recent months. The reason for this rapid rise is pinned on the SNP’s new tax when a property is purchased.
The average price of a property in Scotland has risen by almost 12% in a 12 month period, compare this with property in England which only increased by 5.7% in the same period. Figures are taken from the most recent house price index from Your Move/Acadata
Stampede for a Scottish house
In March alone prices in Scotland rose a massive 5.4%, this was ahead of the April introduction of SNP’s Land and Buildings Transaction Tax (LBTT), this is believed to have been the biggest increase that Scotland has seen in many years. The Help to Buy scheme has come under attack as have SNP ministers as they admitted that funds had already run dry, the scheme was introduced as a way to help people move up the property ladder.
Scottish house builders have attacked the SNP for failing to allocate enough funding to a scheme that promised much but has called short of its targets, the shared squirt scheme was welcomed by many north of the border was it was first introduced. Many from inside the industry now firmly believe that buyers would be placed at a “significant disadvantage to those south of the Border”.
Under LBTT, purchasers pay an escalating rate on different tranches of the purchase price, with five per cent paid on the section between £250,001 and £325,000 and 10 per cent above that. This means anyone buying a home worth more than £333,000 is worse off compared to stamp duty. Families buying a £500,000 home must pay £8,350 more, with the tax bill increasing by £20,850 for those buying a £750,000 home. Those buying a £1 million property pay £34,600 more.
“In what would have been an unimaginable trend just a year ago, house prices are now rising faster in Scotland than in London.
Christine Campbell, regional managing director of Your Move, said: “In what would have been an unimaginable trend just a year ago, house prices are now rising faster in Scotland than in London.
“In part this is due to a short-term scramble to avoid the new Land and Buildings Transaction Tax. For the top of the market especially, a pre-deadline rush has boosted the average price paid in March, so the latest surge in prices is unlikely to be sustained to quite the same extent in April under the new regime.”
It is now worried that because of the high tax environment, middle class families and businesses with be reluctant to invest in Scotland and choose England instead.
LBTT & Help to Buy
The Help to Buy scheme was widely heralded when it was first introduced and seen as a real way to either get people on the property ladder or move them up, with funds now seemingly depleted it’s no wonder that the SNP are coming under attack. With £100 million allocated funds almost gone (this was exclusively for large builders in Scotland) in only 2 months into the new financial year yo beignet see why there is genuine concern.
First-time buyers need just a five per cent deposit to get a mortgage under the scheme, while existing home owners can use it to trade up to a larger property. It has helped more than 7,500 buyers so far.
Philip Hogg, its chief executive, said: “With no details or firm commitment on any future support forthcoming, buyers and builders here are now at significant disadvantage to those south of the border and face months of uncertainty whilst the Scottish Government decides whether or not to launch a successor scheme.
“This is the worst possible outcome, threatening any industry recovery that may be under way with the implications for jobs that this brings.”
In contrast George Osborne has set aside £6 billion to extend the scheme up to 2020 in England. Alex Johnstone, Scottish Tory housing spokesman, said: “All the lip service in the world cannot disguise the plain fact that this SNP government is home ownership averse.”