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For the first time in modern history, both UK and Scottish house prices have risen during a recession. While Scotland continues to navigate its way out of lockdown, we explore what impact COVID-19 has had on the Scottish property market, particularly for Ayrshire, Glasgow and the West, and the predictions for the months ahead.

When restrictions were put into play at the end of March 2020, homeowners, agents, and solicitors were faced with unprecedented changes to the standard conveyancing regime.

Social distancing measures were quickly introduced, the Scottish Government advised that all house moves be delayed, and not long after, in-person property viewings and valuations were no longer allowed. Nevertheless, after two weeks of lockdown, the housing market introduced virtual viewings and arrangements to facilitate on-going buyer interest, with the intention of completing property transactions when rules allowed.

Restrictions also meant homes could not be surveyed, and as most properties in Scotland require a Home Report before brought to market, there was a significant decline in volume of new property listings during the first month of lockdown throughout Scotland.

So, as with most industries in March 2020, the future of the property market was unknown. However, buyer and seller interest remained not only prominent, but increased. After properties were brought to market, official figures by HM Land Registry found that the average house price in Scotland increased by 8.4% over the year, with transactions rising by nearly a third.  The graph below accurately depicts the surge in Scotland against pre-pandemic years:

Most notably, all three council areas in Ayrshire witnessed the largest mainland increase. North Ayrshire was up by 11.7%, South Ayrshire 13.9%, and East Ayrshire being up the most by 17.9%. Renfrewshire also saw an increase of more than 10%.

Click here for more information on other local authorities. 

Industry leaders believe that lockdowns have led to people seeking more space, with the number of ‘sales agreed’ in the last quarters of 2020 being 36% higher than the same period in 2019.

Paul Hilton, CEO of ESPC, said: “The first three months of 2021 has seen a real spike in property sales compared to the previous year. This is to be expected given how busy the market was at the end of 2020, but the LBTT holiday coming to an end in March may also have contributed to increased sales.”

To aid the financial struggles of COVID-19, the Scottish Government introduced an increased nil threshold on LBTT which was raised to £250,000 for buyers in July 2020. However, the LBTT holiday ended as of 1^st of April 2021 in Scotland. As well as this, the Scottish Government provided relief by introducing the three-month mortgage payment holiday for homeowners in March and extending emergency law eviction notice period to protect renters.

Between homeowners looking to upsize, LBTT relief and solicitors and agent’s ability to deliver service remotely, the number of people looking to buy or sell during the pandemic outweighed any negative impact from the pandemic on the property market.

Industry leaders, such as Savills and ESPC, predict a strong property market in the coming months, as the country sees restrictions ease and we work towards an anticipated new normal. The average Scottish house price is expected to grow further by 3% in 2021, with the overall property market growing more than 22.8% between 2021 and 2025.

In the first instance, we highly advise you speak to a solicitor to get an accurate understanding of the market and your local authority. If you are in Ayrshire, Prestwick, or Glasgow, you can get in touch with us here.

As the property market has soared and is set to continue for the rest of the year, particularly in Ayrshire, 2021 could be assumed a profitable year to relocate.

The image below gives an overview of the most frequent property transactions this year in North Ayrshire:

For the Scottish Rental Market, surveyors across both Glasgow and Edinburgh found that there has been an increase in flat availability on the market, due to private landlords deciding to sell. John Brown, rental agent of Edinburgh, believes this is due to the “Covid effect”, such as landlords wishing to reduce their portfolios and void periods between tenancies. As well as that, there are added costs of new Energy Performance legislation for landlords.

For the privately rented sector (if you own and lease your own property to tenants), energy efficiency standards have already been introduced. Since October 1st, 2020, any new tenancy is now required to have an EPC of at least band E and by the 31st of March 2025, all properties will require to have at least EPC band D.

Overall, despite initial concern for the property market, most authorities in Scotland have seen an increase in the number of house sales and prices, which is set to continue for 2021.

If you have any questions, please do not hesitate to get in touch with us!

Whether you are looking for your next home, to purchase additional properties, or you are a first-time buyer, there are financial factors to consider beyond the property price. In this case, you may be charged Land and Buildings Transaction Tax (LBTT) when purchasing a new property.

If you are buying a home in Scotland before the 31st of March 2021, you may pay a reduced rate of Land and Buildings Transaction Tax (LBTT) due to COVID relief. However, as of the 1st of April 2021, Scotland will end the LBTT holiday of reduced rates and the standard rates of LBTT will return as normal.

The Land and Buildings Transaction Tax (LBTT) is a tax applied to residential and non-residential land and buildings transactions including any commercial leases and is administered by Revenue Scotland. Known as Stamp Duty in England, LBTT replaced UK Stamp Duty Land Tax in Scotland on the 1^st of April 2015, following the passage of the Scotland Act 2012 and the subsequent Land and Buildings Transaction Tax (Scotland) Act 2013.

Simply put, the amount of Land and Buildings Transaction Tax you may pay, depends on the price of the property, or land, that you are buying. The amount of tax is payable at different rates on each portion of the purchase price within specified tax band.

There are different thresholds for LBTT to determine how much you may pay. Importantly, the tax you pay is calculated on the percentage of the property that falls above the threshold and it is a one-off payment that must be made no later than five working days of the ‘Payment Date,’ also known as the ‘Effective Date.’

For example, if you purchase a property for £180,000, you will be charged LBTT as follows*:

0% on the first £145,000 = £0

2% on the amount above the threshold, which is £35,000 = £700

Total LBTT amount to pay: £700

*Different criteria are set for first-time buyers and multiple property owners, please see following sections.

The Scottish Budget 2021-2022 confirmed that the ceiling of the nil rate band for residential LBTT will return, as planned, to £145,000 for transactions as of the 1^st of April 2021. Therefore, the table below outlines the criteria as of April 1^st, 2021:

If you are a first-time buyer, there is a relief available which increases the current residential purchase price from £145,000 to £175,000. This means that you will be charged 0% LBTT for any property up to £175,000. Additionally, if the property price is above £175,000, there is a reduction in tax of up to £600 available for first-time buyers, the criteria is as follows:

More information including first-time buyer FAQs is available on the Revenue Scotland website.

Buyers of additional residential properties, such as a second home, are charged 4% of the total purchase price of any dwelling over £40,000 or more. This is known as the Additional Dwelling Supplement, which was introduced on the 1^st of April 2016 in attempt to protect opportunities for first-time buyers.

For example, if you purchase a second dwelling for £100,000, you will be charged LBTT as follows:

4% of £100,000 = £4000

Total LBTT due = £4000

For further information and examples of Additional Dwelling Supplement by Revenue Scotland, click here.

LBTT is calculated by using the total purchase price. This means that if your offering price is higher than the asking price, you will be taxed on the higher amount if it falls above the threshold, as this is the actual purchase price. This is important to note when using online LBTT calculating tools, remember to put in the amount you are offering to achieve an accurate estimate.

There are some circumstances whereby property buyers are exempt from paying LBTT. For example, if you inherit land or property under the terms of a will, you do not need to inform Revenue Scotland nor will you need to pay Land and Building’s Transaction Tax. The same applies if you receive property as gift, ensuring that there is no outstanding mortgage on it.

To find out how much LBTT you could be liable to pay, there are several calculators available online:

Click here to use Money Advice Service’ LBTT calculator.

Click here to use Revenue Scotland’s LBTT calculator.

In most cases, your solicitor will handle any Land and Buildings Transaction Tax due to be paid to Revenue Scotland by submitting the return on your behalf. However, as the property buyer, you are solely responsible to ensure it is submitted and on time (within 5 working days of the ‘Effective Date’). Please note you must still submit a return even if you fall below the threshold and are not due to pay LBTT.

To find out how to submit a return, click here.

So, if you are planning to join (or climb!) the property ladder, it is important to be aware of how LBTT could affect you financially. At Frazer Coogans, we will make sure you know this, and deal with the LBTT return on your behalf. If you have any further questions about LBTT, or are looking for a property solicitor, get in touch with us.

Introduced in 2002 by the European Union, an Energy Performance Certificate (EPC), also known as an Energy Efficiency Rating, is an instrument of the Energy Performance of Buildings Directive that calculates the energy performance of a property from A (Most Efficient) to G (Least Efficient) and is valid for ten years.

Becoming effective in Scotland from December 2008, all properties are legally required to have a valid EPC at the time of construction or conveyancing, and it must be made known to any potential buyer of a property in the Home Report. Similarly, all landlords must order an Energy Performance Certificate for potential tenants before marketing their properties to let.

In Scotland, you are legally required to display the EPC somewhere in the property – most people usually find it in their meter cupboard or next to the boiler.

From a consumer perspective, firstly, it is a legal obligation to obtain and display your EPC, and as such, property owners can face penalties for lack thereof.

Secondly, if you are looking to buy or lease, the EPC will provide information about a property’s energy use and typical energy costs, giving you an accurate estimate of potential bills. Likewise, if you are looking to sell, it can either decrease or increase the value of your property. For example, property with a relatively high energy performance level (A-C), will usually have a higher market price than that of a weaker performing residence as more money has been invested into the energy development and performance.

Although there are initial costs, implementing effective energy-saving strategies such as solar energy, double glazing, insulation and renewable electricity can increase both your EPC rating and property value. Included in the EPC is a recommendation report that should provide information to help reduce the running cost of the property even further. To find out how you can reduce costs and save money with your bills, click here.

Additionally, from a Government perspective, it allows professionals to assess the country’s overall energy ratings per city, council and property type in accordance with the energy efficiency standards. This enables leaders to gain a sound understanding of the areas in need of energy improvements and set accurate and realistic energy-saving objectives for the country.

Overall, as a consumer, it’s important to understand the value and significance of a property’s EPC when selling or buying property. In a world where leaders are accelerating renewable energy plans and strategies, the future value of your home will be impacted, should you ever decide to sell.

Currently in Scotland, there is no legal duty for homeowners to have a specific performance rating. However, the Scottish Government are continually working towards improved energy efficiency for the country and have set long-term domestic objectives for all sectors. By 2040, Scotland aim to have all residential properties to have achieved an EPC rating of at least C (69-80 on scale of 0-100).

For the privately rented sector (if you own and lease your own property to tenants), energy efficiency standards have already been introduced. Since October 1st, 2020, any new tenancy is now required to have an EPC of at least band E and by the 31st March 2025, all properties will require to have at least EPC band D.

So, although most homeowners don’t need to worry about their EPC score just yet, it’s important to be aware of what’s coming. Besides, it’s not the worst thing to invest your time and money into. You’ll improve your property performance and be contributing to the global fight against climate change.

If you don’t have an EPC located in the house, you should be able to source it online. Otherwise, when selling your home, you would obtain a Home Report which should contain the EPC and any recommendations for improvement.

For properties sold or let after the 4th of January 2009, your property should already have an EPC. You can find it out by following this link and entering your postcode.

If you can’t find it there, you can have an Energy Performance Assessor visit your home and provide one after assessment. Please note this service may be restricted due to COVID-19.

Now go on, go check the boiler. You know you want to…

Leading Ayr based law firm Frazer Coogans Solicitors are delighted to announce that they have further expanded in Ayr with the acquisition of the assets of the firm of Lamonts Solicitors, 16 Miller Road, Ayr.

Mark Meehan and Eileen Lamont have run Lamonts Solicitors for over 34 years, establishing an enviable reputation for service. Mark Meehan will now take retirement and Eileen Lamont will stay on with Frazer Coogans as a part time consultant. The staff of Lamonts solicitors transferred over to Frazer Coogans on 1st November 2019 and Frazer Coogans will trade from 16 Miller Road, Ayr as well as their principal office at Dalblair House, 46 Dalblair Road, Ayr and other offices.

Frazer Coogans Solicitors was originally established in Ayr in 1985. In 1995 the current Senior Director, Norman Geddes, took over the firm. From a small beginning Norman has led Frazer Coogans into rapid expansion to be one of the leading firms in the West of Scotland. In May 2015, Frazer Coogans opened their Prestwick branch, acquiring the former firm of Lawson Russell Solicitors. In 2018 Frazer Coogans expanded to have an office in Glasgow.

Norman Geddes, Senior Director of Frazer Coogans commented “I wish Mark a long and happy retirement and assure him that Frazer Coogans will continue to provide the excellent service which Lamonts have provided to their clients over the past 34 years . We welcome the new staff members to our busy team and look forward to this new chapter”.

With 11 Solicitors and a total of over 40 employees, Frazer Coogans prides itself in providing a comprehensive legal service at a competitive cost. It looks forward to also providing a first class service to all of the clients who transfer from Lamonts.