Referendum stalled Scottish housing market

Demand for housing dropped during September to its lowest level since January 2013 as referendum uncertainty hit the Scottish market, a new survey reveals.

The number of new homes coming onto the market also decreased, with a net balance of 14 per cent of respondents reporting a decline in new instructions, the lowest since September 2012.

Despite the slow-down, greater confidence was evident in house prices, with 33 per cent of respondents reporting a growth in house-price momentum in Scotland over the last three months. The findings were part of the Royal Institute of Chartered Surveyors’ (RICS) UK residential market survey.

Sarah Speirs, director RICS Scotland, commented: “The effects of the referendum appeared particularly significant to the housing market during September, with a considerable drop in the number of interested buyers and stock coming onto the market. 

“Looking ahead, we expect to see an increase in supply and demand as the market settles, but with interest rates still at historically low levels and long-term house price expectations positive, households are not under any real economic pressure to sell. Next year, we expect the house-price outlook to be far more subdued.”    

Meanwhile, last week, Finance Secretary John Swinney set out the Draft Scottish Budget 2015/16, which included proposed tax rates and published tax receipts forecasts for the first time, ahead of the Land and Buildings Transaction Tax (LBTT) and Scottish Landfill Tax (SLfT) coming into force on 1 April 2015. The LBTT will replace stamp duty and will be the first time the Scottish Parliament has levied taxation since the Union in 1707.

He said: “The Land and Buildings Transaction Tax is the first tax created by the Scottish Parliament in 300 years. We now have the chance to apply the principles set out by Adam Smith – that there must be certainty, convenience for the taxpayer and efficiency of tax collection and, most relevant to the proposals which I [have] announced, that taxes should be proportionate to the ability to pay.”