Scotland is maintaining its reputation as an attractive destination for property investment. The Scottish Private Rented Sector has doubled in size in the last 10 years and the number of households in Scotland is projected to increase by 61,000 by 2021*. Recent statistics have shown that buy-to-let landlords in Scotland enjoy solid returns on investment, on average 4.9%, and increasing rental rates. If you’re considering Scotland as a destination for your investment, as with any major investment, it’s important to be aware of the trends underlying this landscape.
In last week’s Scotsman Kirsty McLuckie wrote a thought-provoking article about the number of homes people can expect to own over the course of their lifetimes. Britons in their 20s and 30s (who can loosely be grouped as ‘Millennials’) will own, on average, 1.7 homes throughout their lives – half the number their parents owned. This decline in the number of house purchases is attributable to a number of factors.
2017 marked the first time in Scotland potential home owners have needed to raise £21,000 for a deposit. This represents a barrier to entry for many people, forcing them to stay in the rental market for longer than their predecessors – a rental market with rising prices, further hindering the potential to save for deposits. National average rents in Scotland show a steady 1.5% growth year on year, and in Edinburgh alone property prices are projected to rise 23.4% by 2021*. Increasing house prices, stagnating wages and the much-maligned “gig economy” all contribute to fewer houses being bought and sold by people in their 20s and 30s, which in turn drives demand in the rental market.
This social and financial landscape represents an opportunity for buy-to-let landlords – it can be assumed they are more likely to have the necessary capital to place a deposit when an attractive property comes on the market. The trifecta of (relatively) affordable property, consistent returns on investment, and solid rental incomes makes Scotland the perfect place for landlords to build and expand their property portfolio. Whether you’re investing domestically or from overseas our team of local experts will help you find an investment solution perfectly suited to your needs – find out more about our property investment services here.
*These statistics are taken from our upcoming Quarterly Property Investor Review