Scottish property investors were able to sell their homes with a premium in the first quarter of 2019, according to figures released by Scottish housing site s1homes. Its Scottish House Price Report found that sellers in the Scottish housing market sold their homes for £4,000 higher than their asking price.
This premium on sold properties in Scotland is smaller than it had been in late 2018, according to s1homes. In the final quarter of last year, sellers were able to sell with a premium of as much as £14,300. The recent reduction in the premium was due to a modest rise in asking prices and a fall in the average selling prices.
The average property was given an asking price of £169,947 in the first quarter, whereas final selling prices were £174,317. The report estimated that these prices were based on the sale of 20,213 properties over the course of that period.
News of a shrinking sellers’ premium in the Scottish housing market followed a French Duncan LLP report which found that Scottish landlords faced higher tax bills due to differing tax regimes compared to those in England.
Flats experience greater premium
Detached homes in Scotland held the greatest premiums when sold, with the average detached home sold for £26,000, according to s1homes. This was more than the original asking price, with an average asking price of £284,283, compared to a final selling price of £257,462 in the first quarter.
Scottish flats were estimated to have some of the second-highest seller premiums by property type. The average flat was sold for £23,000 more than its asking price, with the average flat ultimately being sold for £136,054, according to s1homes.
Semi-detached homes had the lowest premium, with asking prices of £164,375, compared to a selling price of £165,716, giving them a premium of over £1,000.
A ‘reality gap’
The new report by s1homes used the term ‘Reality Gap’, when referring to the premium between Scottish asking and selling prices, to gauge the difference between sellers’ expectations and the valuations they ultimately achieved, during sales in the Scottish housing market.
Esther Ballesteros, marketing manager at s1homes, addressed the overall decline in the Scottish selling premium: “The Q1 analysis shows that house sellers of most property types are being more realistic and therefore achieving or exceeding their asking prices.”
She added: “However, detached properties are still being priced at unrealistic levels…reflecting how the higher end of the market is particularly entrenched with almost no significant changes in the Reality Gap in the past 12 months.”