Scottish ‘no’ vote spurs real estate market

Scotland's housing market bounced back at the end of 2014 after the "no" vote for independence gave the country's real estate a more secure future, a study by Knight Frank said on Monday.

Thistle Street in Edinburgh, Scotland
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Thistle Street in Edinburgh, Scotland

The international real estate agent said prices rose 0.5 percent in the capital city of Edinburgh between October and December last year. Prices for "prime" country houses rose 1.0 percent in the fourth quarter, following six months of flat growth.

"The market responded to the certainty provided by the result of the referendum. After months of uncertainty, buyers have felt more confident about making a decision to move house or purchase a property," said Oliver Knight, a residential researcher at Knight Frank, in a report on Monday.

The majority of Scots voted to remain part of the United Kingdom in a referendum held on September 18, 2014, after hard-fought campaigns by the pro-independence Scottish National Party and major U.K. parties in Westminster. Just over half (55.3 percent) of Scots voted "no" to independence; 44.7 percent voted "yes".

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Knight Frank said the number of sellers as well as buyers had risen in Edinburgh since the referendum, and forecast the trend would continue in 2015.

"We expect to see an increase in the number of transactions at all levels of the market, as buyers and sellers who may have putt off making decisions until after the vote, return to the market," said Knight Frank analysts in a separate report.

"Activity will be greatest in key cities including Edinburgh, Aberdeen and Glasgow, as well as in the rural countries that make up their commuter belts."

A taxing problem

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An upcoming introduction of Scotland-only property taxes may have also provided a short-term boost to the market.

"The higher upfront cost of moving when the LBTT (Land and Building Transaction Tax) comes into force in April 2015, especially in the prime market, has prompted some homebuyers and vendors to make quick decisions," said Oliver Knight.

Under the proposed new stamp duty rates, anyone with a property valued at more than £254,000 will see their tax bill increase. The levy charged on a buyer of a £900,000 ($1.4 million) property will increase by 92 percent, according to Knight Frank.

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