Agent says jury out on stamp duty

LEADING estate agent Simon Rettie has said the imminent new Scottish stamp duty regime may have contributed to the "busiest January in 25 years" as higher-end buyers rush to dodge a tax hike.

Mr Rettie said he could not remember a busier start to the year in transaction volume for the high-end agency:

"Part of it is people getting in before the change, though whether there will be a slowdown afterwards remains to be seen - there will be a slight pause as people work out what is going to happen."

Under the new tax, Scotland's upmarket properties worth more than £325,000 will pay 10 per cent stamp duty compared with three per cent previously and five per cent south of the Border.

Mr Rettie was commenting as latest accounts at Companies House showed Rettie & Company, the Edinburgh-based agency that he controls, enjoyed a significant upswing in profits in the year to April 2014. Rettie's turnover rose from £4.85 million to £5.74 million, while pre-tax profit jumped from £270,288 to £674,533, a rise of 163 per cent.

The firm trimmed its headcount by five to 107 during the year. It ended the year with cash up from £1.07 million to £1.76 million, and shareholder funds up from £2.03 million to £2.44 million. The dividend was raised from £96,300 to £102,024, and the highest-paid director assumed to be Mr Rettie received £133,891, up from £128,693.

A year ago, when the firm's profits had fallen by about 40 per cent, Mr Rettie said the firm had invested heavily through the recession to take advantage of the upturn.

He said yesterday: "We have picked up where we left off and it has got stronger post-referendum, people have been getting on with their lives and there is confidence back in the market."

He said transaction volumes had shown particular strength in Edinburgh and Glasgow where Rettie had gained market share in the past 12 months:

"We are also seeing the long-awaited recovery in the country market. The primary areas of East Lothian, Perth, Angus and Fife seemed to be the first to wake up, though some areas of West Scotland, Ayrshire and the Borders remain quite challenging."

On the political outlook, Mr Rettie said the core Scottish market was less susceptible to new taxes on ultra high-value property, with only 142 homes sold in Scotland for more than £1 million last year.

The accounts show a 41 per cent rise in agency fees for 2013-14 and a 49 per cent uplift in new development fees. Management fees were down by seven per cent and non-transactional income dipped to 16 per cent of turnover.

Mr Rettie said: "Land and development and structured finance deals have made a significant impact in the last year or two, outside the Rettie & Co business but in our LLP.

"What we have done since last year is very encouraging and I would hope that this time next year we will be able to report an improved performance again."

Mr Rettie said profits had regained pre-recession levels but the business was now more diversified: "We do a lot more different things, which we will see in future years feeding through into the profitability of the business. The recession is not all over in some cases, it has been a long time."