SCOTLAND’S high-end property market has suffered a slump with sales of £1million homes falling by more than a third.
Research shows that 53 homes were sold in the first half of the year which experts are blaming on economic uncertainty causing stagnation in the market.
Edinburgh saw the biggest fall in million-pound homes sales in Scotland, with 19 fewer sold in the first six months of 2017 – a 35 per cent drop compared to the same period last year.
Experts say the downward trend in the capital may also be partially down to a loss of jobs in the finance industry, a huge section of the Edinburgh workforce.
However, despite the economic dip and sluggish market, the capital still accounts for more than half of £1m property sales in Scotland, with 31 transactions recorded in areas such as the Northumberland Street in the New Town.
Across the country, Glasgow saw four homes sold for more than £1m which is the same as last year, East Renfrewshire saw a fall of two to one, Aberdeen saw just one sold which is half of 2016 and Stirling saw a fall of three, with just one being sold.
However, East Dunbartonshire saw three £1m homes sold after none the previous year, while Perth and Kinross saw a doubling of sales to two.
The 35 per cent drop in Scotland comes as the rest of the UK saw a decrease of just one per cent over the same period, according to Bank of Scotland research.
It also contrasts with a 55 per cent increase in sales of £1m properties seen in the north west England.
Across the UK, Yorkshire and the Humber experienced a rise of 45 per cent and in the West Midlands there was a 33 per cent jump.
The research looked at figures from the Land Registry covering England and Wales and the Registers of Scotland.
London, where sales of £1m-plus homes tend to be concentrated, saw transactions in this bracket drop by seven per cent, from 4,230 to 3,940.
Donald Gateley, Bank of Scotland’s head of private banking for Scotland, said: “While sales of £1m properties across Great Britain have experienced a small dip, this has been more acute in Scotland due to fewer homes in this category.
“There are a number of factors at play here, with uncertainty in the market, interest rates and economic stability all having a bearing on people’s appetite to buy and sell high-end properties.
“With the Office for Budget Responsibility revising down forecasts for house prices and housing transactions, we expect this slowing to continue in Scotland into the new year.”
“It’s not just about buyers. Owners of valuable properties who are planning to downsize or relocate may also wish to consider seeking advice around how they could pass this wealth on to family members.”
Under the Land and Buildings Transaction Tax (LBTT), which replaced Stamp Duty in Scotland, a charge of 12 per cent is applied on sales of homes worth more than £750,000.
According to estate agents, who have criticised the LBTT scheme, this means a £1.2m house in Scotland would be taxed at £102,350, compared to £63,750 in England.
Carl Warden, senior associate at Bell Ingram estate agents, said last month that the Scottish system had “stunted the performance of the property market for those higher value transactions”.
Scottish Conservative finance spokesman Murdo Fraser said the Scottish Government’s decision to “hike LBTT rates is damaging the whole of Scotland’s property market”.
The Tory MSP said: “The drop off in sales isn’t just hurting homeowners, it is affecting all taxpayers as the projected revenues are down as well.”
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