Scottish house prices fall in April following LBTT holiday end

House prices in Scotland fell by 1.5% in April after the Land and Buildings Transaction Tax (LBTT) holiday came to an end in March.

According to the latest Walker Fraser Steele Acadata House Price Index (Scotland), however, average Scottish prices still remained 10.2% higher than they were in April 2020.

The data from Walker Fraser Steele revealed that 25 of 32 local authority areas in Scotland recorded falls in house prices during April. This compares to 25 areas displaying price rises in March.

The figures mean the average house price in Scotland at the end of April sat at £203,292.

Walker Fraser Steele business development manager, Alan Penman, called the 10.2% annual growth in Scottish house prices an “important piece of context”.

“Our report is a reminder, if any were needed, of how important fiscal support is to the performance of the housing market and how tax holidays drive behaviour and impact confidence,” he commented.

“We’ve got used to prices rising almost inexorably, but we can see that in April 2021, the monthly growth rate in house prices fell by -1.5%, as a good proportion of higher-value sales had been completed in March.

“This left mainly lower-value sales being made in April. The downturn in the growth of average prices that occurred in April also feels significant because it contrasts starkly with the 10 months of almost uninterrupted price growth that took place from May 2020 onward.”

Penman also highlighted the impact of the LBTT holiday in Scotland, which gave buyers a higher nil tax threshold of £250,000. Unlike the Stamp Duty Land Tax (SDLT) holiday in England, however, the LBTT holiday was not extended beyond 31 March.

“In terms of transactions, the end of the LBTT holiday in March boosted sales for that month but thereafter things have cooled,” Penman added.

“What this has meant, at a regional level, is that the average value of house prices in April fell in 25 of the 32 local authority areas in Scotland, compared to just seven falls in March. This is by no means a sign of things to come but it demonstrates again the impact of the tax holiday.”

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