£1m house sales treble in rush to beat new taxes

24 Napier Road in Merchiston is on the market for offers over �1.75m. Picture: ESPC

24 Napier Road in Merchiston is on the market for offers over �1.75m. Picture: ESPC

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SALES of £1 million homes have trebled in the Capital – but experts have warned that the new figures are painting a false picture of the property market.

More than half of the 111 seven-figure sales in Scotland in the first half of this year were completed in Edinburgh.

Everybody wanted to get everything through before April, so there was a huge push

David Alexander

In total, 63 homes exchanged hands for more than £1m in the city – a tally which stood at 21 in 2014 – while similar sales across the UK were down 11 per cent.

But property experts predicted the rest of this year would see a “horrific” fall in high-end house sales of up to 250 per cent.

They said the apparent boom was down to the scrapping of stamp duty in Scotland, which was replaced by the land and buildings transaction tax (LBTT) at the beginning of April.

David Alexander, of estate agent DJ Alexander, said: “Up until April, things were really good. Everybody wanted to get everything through before April, so there was a huge push – but then after April, sales have fallen off a cliff.”

A spokeswoman for property giant ESPC also said the statistics demonstrated the “LBTT effect”.

She said: “[The tax change] meant that people who wanted to sell their homes that were valued at over £333,000 rushed to put them up for sale before April 1. Similarly, people who wanted to buy a property over this level wanted to make the purchase before April 1, as after that date they would have to pay more tax under the new regime.

“Because the rest of the UK didn’t have these new taxes introduced, this is likely to be why the sale of £1m homes doubled in Scotland, compared with the rest of the UK.

“The reason for more [sales] in Edinburgh is that average property prices are higher in Edinburgh compared to other Scottish towns and cities.”

The latest figures – compiled as part of the Bank of Scotland Million Pound Property Report, which uses the Registers of Scotland – found Edinburgh had seen 42 more £1m house sales in the first half of the year than during the same period in 2014.

Areas such as Merchiston, where one Napier Road house is currently on the market for £1.75m, are known hotspots for top-end buys.

Elsewhere, East Lothian has seen the second biggest boom in £1m sales – accounting for eight per cent of all those across Scotland in the first six months of the year.

Nitesh Patel, economist at the Bank of Scotland, said: “The amount of homes in Scotland that have sold for more than £1m has more than doubled within a year, which is a stark contrast to Great Britain as a whole, which has seen an 11 per cent decrease.

“Sales south of the Border may have been impacted by new stamp duty rates last December – while the equivalent land and building transaction tax came into force for homebuyers only in April.

“It’s no surprise that Edinburgh had the most million-pound sales in Scotland, however four regions went from having no sales last year to three or four this year – East Renfrewshire, Glasgow City, South Ayrshire and South Lanarkshire.

“Edinburgh, East Lothian and Aberdeen continue to dominate the market share of million-pound property sales in Scotland.”

alistair.grant@edinburghnews.com