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Fri 24 July 2020
Mike Halliday looks at the demand for rural property from the perspective of both the purchaser and seller.
Small farms and rural properties with land are seeing a noticeable increase in demand from city buyers, particularly those from the South, following the easing of the Covid-19 restrictions.
Following discussions with active buyers, the reason behind the desire to relocate has been the extremely difficult lockdown experience in those in areas of high population density. The idea of “Escape(ing) to the Country” and having a bit of space outside appears to be gaining some momentum.
Another important factor for the increase in demand for rural properties has been the dawning of the Zoom and Teams meeting – a lot of people have realised that they no longer need to commute to an office every day as video conferencing allows face to face contact and sharing of collaborative documents.
The Scottish Government announcement to increase the threshold at which Land and Buildings Transaction Tax (LBTT) will be paid from £145,000 to £250,000 provides further incentive to buyers. While the maximum saving is only £2,100 per transaction, every little helps.
An increase in demand for rural properties is clearly good news for those considering selling, especially if the potential buyers have recently sold in the inflated Southern property market.
With regards to the reduction in LBTT tax, a 2011 UK Government study found that previous cuts designed to help first-time buyers mostly resulted in higher house prices, thus benefiting sellers rather than purchasers.
The Chancellor of the Exchequer’s recent announcement that a review of Capital Gains Tax is to take place, plus the increase in demand from purchasers, might be enough to encourage those thinking about selling in the next few years to bring their property to the market earlier than planned.
There is a debate amongst property professionals whether the Capital Gains Tax review will result in a “tax grab” by Government, or the more cynical minded suggest that the review is designed to stimulate property sales and help kick start the economy. Only time will tell but, now might be the ideal time to bring your rural property to the market.