In Glenham’s latest Quarterly Property Review, we analysed the latest data available on the property market in Scotland and saw that property remains one of the top investment choices in terms of Return on Investment and the Scottish markets.
Current UK Market
The annual house price growth has fallen to 2.1% from 5.1% on the previous year, but prices are expected to continue to grow at this slower rate over the next few years. This slowdown should not be seen as a crisis – it can be seen as a natural readjustment after a spike in the market. The discrepancy between supply and demand in housing in the UK will continue to drive prices up.
The Scottish residential property market is resilient and our outlook is optimistic, but this is driven by exceptional performance in a few key geographical locations like Glasgow and Edinburgh. The average price of a property in Scotland rose 3% on the previous year, an increase driven by the continuing limited supply and demand from first-time buyers.
UK Rental Market
Residential rental property has soared in value over the last five years, increasing over 50%. The value of the assets in the Private Rental Sector (PRS) is worth £1.29 trillion to the UK economy. For the first time, the residential rental market is worth more than mortgaged owner occupied stock.
Over the same time period there has been a 28.3% uplift in the number of homes in the private rental sector, bringing the total to over 5.7 million, and this is expected to reach 7.2 million by 2025.
Scottish Rental Market
The private rental sector market has more than doubled in size in the last ten years and levels of owner-occupation are declining in all but the oldest age brackets, putting a clear emphasis on PRS properties in Scotland.
The average price of rent has shown a steady year-on-year growth of 1.5% after two consecutive quarters with no significant increase.
Edinburgh Rental Market
Edinburgh’s population is projected to increase 17% by 2039 and the long-term household growth is 47%, 16% higher than Scotland’s overall growth. Similar to the national situation, demand for rental property in Edinburgh outstrips supply. Prices in the capital increased 5.2% last year and, while we expect this to slow to 2% or 3%, we don’t expect demand to drop any time soon.