Scottish house prices saw a month on month decline in June, for the first time since February, according to Your Move and Acadata’s house price index for Scotland.
However, taking into account the annual trends, prices were up 4% on the same period in 2015. This represents the largest annual growth rate since May 2015.
While monthly house prices were down compared to May, the average price of property was £170,404 in June, still 0.97% higher compared to the start of the year. Following April’s introduction of the 3% tax increase on second homes, house prices and transaction figures remain arguably skewed in the second quarter of this year, as buyers pushed to complete before the surcharge came into effect, the index said.
This impact was felt most acutely in March’s transaction figures. Transactions in that month were almost 100% higher than February 2016 – a peak not seen since November 2007.
Christine Campbell, Your Move managing director in Scotland, said: “June was the first month that the spike in house prices as a result of the 2015 LBTT changes dropped out of the annual figures. This previous distortion in property prices goes some way to explaining the seemingly significant annual price increase we saw this June.
“Whilst market sentiment remains strong, with continued demand from both buyers and sellers, it will be interesting to watch how potential Brexit implications play into transaction and price figures over the coming months.
“Long term, the outlook for the housing market looks favourable. However, with housing demand continuing to vastly outstrip supply, it is important that we see a concerted focus on building new property to ensure there are enough homes for potential buyers across the country.”
John Tindale, senior housing analyst for Acadata, added: “It remains too early in the housing timeline for any definitive conclusions to be drawn about the outcome of the EU referendum and its effect on Scotland’s property market. The Registers of Scotland have to date only released data up to the end of June 2016, so this report can only consider the sales which in the main took place prior to the referendum. There is the possibility that some sales in the released data occurred between the vote on June 23rd and the end of that month, but the decision to have purchased the property and the price agreed will have been prior to the EU result.
“Consequently, it will be at least another month before we start to obtain hard facts about what has happened to sales volumes and house prices following the Brexit vote. This June report therefore reflects on how the uncertainty allied to the referendum has influenced the housing market, not the outcome of Brexit itself.”