RISING numbers of Scots are moving home as the stamp duty replacement and record low interest rates have cut some of the exorbitant costs.
The Land and Buildings Transaction Tax (LBTT) has brought down the costs of buying some properties, particularly at the cheaper end of the market over the past year.
Combined with low rates of 0.5 per cent keeping mortgage costs down, many home hunters are seeing it as an ideal time to buy and, according to new figures, there has been a three per cent rise in transactions between 2014 and 2015.
Bank of Scotland figures show the number of home movers is up three per cent, up from 31,800 in 2014 to 32,850 last year.
Chris Breckenridge, associate director at estate agents Savills, said he thought the market had “definitely increased up to a certain level” due to the LBTT and interest rates.
“The LBTT has had a positive effect at the lower end of the market, but at the top end of the market, where the LBTT rates are higher things are not quite so rosy,” he said. “Lower interest rates have also helped and mortgage lending has improved, especially at the lower end of the market things are really improving.
“Buyers are now fully aware of the LBTT, what they might not be aware of is the new three per cent additional charge on second homes, which could have an impact for investors.
Generally, we are fairly positive about the market for the foreseeable future.”
Buyers now pay zero per cent LBTT on all transactions up to £145,000, higher than the £125,000 threshold in England and Wales.
But the average stamp duty paid by a Scottish home mover was £2,014 based on an average house price of £201,429. Under the new system, this has fallen to £1,129, a saving of £886.
This has helped first-time buyers, of whom an estimated 27,900 got on to the property ladder in 2015, a vast improvement from the decade low-point in 2011 when just 16,700 people managed to buy their first home. Buyers are now having to pay more for property, research found, with the average price paid by a home mover having increased by 18 per cent over the past five years – up from £170,418 in 2010 to £201,429 in 2015.
While the average deposit put down by a home mover in 2015 was £60,732, the equivalent to 30 per cent of the average purchase price of £201,429.
Nicola Noble, mortgages director at the Bank of Scotland, said: “The savings created by the new LBTT, low mortgage rates and rising real pay, are combining to drive growth in the housing sector and this is something that is reflected in these findings.
“2015 was a good year for those looking to move home. The ongoing increase in house prices throughout the year will have been especially welcomed by those who bought when house prices were at their peak, and who have been looking to rebuild their equity in order to make their next move.”
An additional LBTT surcharge of three per cent of the total property value is due to come into force in April on all second home purchases. It remains to be seen how this will affect the market.
The LBTT rate for properties between £145,000 and £250,000 is 2 per cent; between £250,001 and £325,000 is 5 per cent; between £325,001 and £750,000 is 10 per cent and all above £750,000 are in the 12 per cent band rate.
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