TRADE body Homes for Scotland (HfS) has urged the Scottish Government to provide clarity on the timing of changes to the Land & Buildings Transaction Tax (LBTT).
Finance secretary Kate Forbes revealed the level at which LBTT starts will be raised from £145,000 to £250,000. The Scottish Government is also launching a First Home Fund.
HfS director of policy Fionna Kell said, “These announcements are welcome support for the Scottish housing market but both require further action if the benefits are to be fully maximised for individual customers and the wider economy. On LBTT, it is absolutely crucial that we get an early date for implementation otherwise we are at risk of seeing already fragile market recovery stall as buyers delay purchases.
“With regards to the First Home Fund, this will help those who have been affected by mortgage lenders reducing Loan to Values but we also need to see the scheme extended beyond next March as so many transactions and housing completions have been delayed by the construction shutdown.
“Both of these issues are core elements of the industry recovery plan we are preparing to submit to the Scottish Government.”
Faisal Choudhry, head of Savills Residential Research in Scotland, described the LBTT change as ‘good news’ for property buyers who will save money in a challenging economy. He added, “It is also positive for sellers who will see demand for property rise further. Clearly the move will largely benefit first time buyers, however there will be a knock-on effect throughout the market which will have a stimulating effect on the economy.
“This is the first time the LBTT structure has been tweaked since it was introduced five years ago, and we hope that this will be part of a long term adjustment rather than a short-term fix. If you are buying at £250,000 and above under the new regime you will now be saving £2,100. Although the saving is larger in England, Scottish property still represents comparatively good value for money. Prior to the pandemic, Scotland had seen record market activity, with demand outstripping supply.
“The Scottish finance minister has not been able to confirm when the regime will start, but clearly there is some urgency required here as the announcement could have a negative effect in the short term while people sit on their hands until the new rates are introduced. This would be counterproductive in terms of the Scottish Government’s aims of raising tax revenue, stimulating the economy and supporting the market in Scotland.”
Hazel Davies, sales and marketing director of Cruden Homes said, “Whilst we have maintained strong levels of interest throughout the pandemic, these support measures will give a much needed boost to our sector and help prospective buyers looking to get on or move up the property ladder. However, it is critical that the LBTT relief is implemented imminently otherwise we risk stalling market recovery and we therefore look forward to some clarity in that regard.”
Doug McLeod, regional MD for Barratt Homes Scotland said, “Housebuilding is a stimulator of our economy and the more we can do to assist growth, activity and jobs, the faster we can recover from the impact of the pandemic. Therefore, we welcome the support measures announced by the finance secretary. Barratt Scotland regularly offers LBTT contributions to help save buyers money but a raise in the starting threshold, once implemented, will be good news to those considering a new home. The First Home Fund has also allowed many first-time buyers to take a step onto the housing ladder and an increase in available funding will help even more to do so.
“We are passionate about nurturing the next generation of talent through our apprenticeship programme and retaining vital skills within the construction industry. The announcement of an additional £100 million to support employment and training is a step in the right direction for not only our industry but the wider economy too.”