International investors have long favoured the United Kingdom for a variety of reasons but why are increasing numbers looking further north to Scotland and investing in Glasgow? What factors are helping drive cities such as Glasgow to outperform other regions in England? This short article aims to help provide the answers.
Why Invest in Scotland?
Compared to other UK locations, property prices in Scotland are relatively affordable. Property investors seeking potential capital growth and high rental income will find a great option in a location with a competitive business environment, excellent transport links to national and international business hubs, and access to talent, skills and training.
Benefits of Scottish Property
- All property freehold
- No ground rent on flats
- No 2% non-resident stamp duty surcharge
- Seller provides survey report
- Low-entry level price, high yield
- Fast completion, 30 days on average
Why Investors Are Turning To Glasgow?
Glasgow Named as Buy-To-Let Hotspot
One of the UK’s major cities, Glasgow has been tipped as a buy-to-let hotspot closely followed by London, Manchester, Birmingham, Liverpool and Nottingham in England, where according to Simply Business ‘’tenant demand is likely to be high and property growth likely to be steady.” A key factor in all these regions is well-established universities. Renting to students is often a favoured choice for new landlords due to reduced acquisition costs, yearly demand, and the possibility of high rental returns.
The CEO of Simply Business UK, Alan Thomas, commented: “It’s heartening to see continued growth in the buy-to-let sector, with our data demonstrating that Glasgow is becoming an attractive spot for landlords to invest. Glasgow has topped the list, with a 12% increase in the number of buy-to-let properties in the city, whilst Nottingham and Leeds came in second and third respectively, both with an increase of over 8%.”
Affordable Property Prices
Glasgow is the most affordable city in Scotland to buy a property and live in. Without doubt one of the key investor attractions of Glasgow property is the very low capital entry level. This must also be considered alongside the fact that under Scottish property law, the majority of properties are owned as title absolute or freehold.
This is an important difference when compared with properties in England where the majority of flats or apartments are leasehold. This often involves a freehold held by the landlord whereby an annual ground rent is charged to leaseholders. In addition, there will be an annual service charge, again charged to leaseholders, for communal maintenance and buildings insurance (sometimes charged separately).
A low-value flat in Scotland can therefore be acquired on a freehold basis with the benefit of no annual ground rent payments to a superior landlord or freeholder. Communal charges will also generally be more modest, particularly if local authority managed, and some buildings will rely on the owners to form a committee to arrange essential communal repairs and maintenance.
It is therefore entirely possible to invest from as little as GBP50,000 in the freehold of say, a 1-bedroom flat which can give gross yields of 10%+. This also provides an opportunity for investors to ‘test’ the market with a low-value investment or indeed to build a portfolio of several lower value, high-yielding properties.
This all results in a dynamic market available to even the most modest of investors.
High Rental Yields
Recent challenges faced by landlords in England have resulted in investors seeking ways to increase their ever-diminishing yields.
Increasing legislation requiring more landlord compliance, Section 24 (the removal of mortgage interest relief) and concerns over tenant affordability have forced many investors to look at areas and sectors where they can maintain and grow their property investment returns.
Property in Scotland can realistically provide the high (and often double-digit) gross yields from standard tenancies (known as Private Rented Tenancies) only achievable in England via higher-risk HMOs or social housing.
Properties available below GBP100,000 typically offer the highest gross yields and many areas have also enjoyed strong capital growth in recent years, providing an attractive balance of yield and growth via a low capital/risk strategy.
Economy
Glasgow has the largest economy in Scotland with the 3rd highest GDP per capita of any city in the UK. Glasgow is Scotland’s largest city, with a population of 1,698,000 in 2023. The leading industries in the region are public admin education & health, distribution, hotels & restaurants, banking finance & insurance, and transport & communication.
Infrastructure
Glasgow boasts the UK’s second busiest railway station outside of London. It benefits from a well-developed transportation network, providing excellent access and connectivity. Situated on the River Clyde in west-central Scotland, Glasgow is at the heart of Scotland’s only metropolitan region.
- Glasgow City Centre To Glasgow Airport – 15 mins
- Glasgow City Centre To Glasgow Prestwick Airport – 45 mins
- Glasgow City Centre To Edinburgh Airport – 1 hour
Glasgow Airport
Glasgow Airport is the largest hub in Scotland for both long-haul and charter flights, offering destinations worldwide, including Asia, the Middle East, the Gulf, Europe, the Caribbean, Canada and the U.S.
Subway/Underground
15 subway stations are distributed over a 10 km circuit of the West End and City Centre of Glasgow, according to Strathclyde Partnership for Transport (SPT).
Train/Rail
Glasgow has the UK’s largest suburban rail network outside London, with 186 stations across the Greater Glasgow area.
Travel Duration:
- Glasgow to Edinburgh – 50 mins.
- Glasgow to Manchester – 3 hrs 30 mins.
- Glasgow to London – 4 hrs 30 mins.
Education
Glasgow has a student community of over 185,000 students from 140 countries. Glasgow is also home to several universities including:
- University of Glasgow
- University of Strathclyde
- Glasgow Caledonian University
- Glasgow School Of Art
- University of the West of Scotland
Glasgow Key Areas
City Centre
The neighbourhood of Glasgow city centre is full of culture and history, with some of the UK’s best-preserved Victorian architecture, and offers great options for shopping, dining and nightlife.
North
In Glasgow’s north, visitors can enjoy a mix of urban adventure and peaceful green spaces, while also experiencing the heritage of the canal-side.
East End
Glasgow’s east end boasts a mix of old and new, with some of the city’s oldest buildings and exciting new developments. The neighbourhood is known for its unique blend of creativity and heritage, and a welcoming community atmosphere.
Southside
The southside of Glasgow is a green and creative area, with traditional tenements, large parks, and trendy cafes, perfect for a relaxing afternoon out.
West End
The west end of Glasgow is a bohemian neighbourhood, with top attractions, quaint alleys, great food, and a laid-back atmosphere. This area has frequently been featured on ‘coolest neighbourhood’ lists.
Glasgow Property Market Forecast 2024
According to Savills, properties in Scotland are predicted to see a 20.2% increase by 2028.
FAQ’s
Why Should I Invest in Glasgow?
Glasgow property offers low entry-level pricing, hence lower risk, and considerably higher yields when compared with England. This is particularly suitable for cash buyers who do not wish to apply for mortgage finance during the current economic climate. Most properties including flats are also sold as freehold or ‘Title Absolute.’
What are the advantages of buying Glasgow property?
Buying property in Glasgow is beneficial to overseas investors as the speed of transactions, or completion, is much quicker than in England. Survey reports are provided in advance by the seller, so buyers know what to expect before making an offer. Unlike in England, there are also no 2% ‘non-resident’ stamp duty surcharges to pay.
What do overseas investors need to know when purchasing Scottish property?
You will need an experienced agent to guide you through the process and help you understand the costs involved, including the Scottish equivalent to stamp duty. You will also need a solicitor who is qualified in Scottish property transactions as Scottish property law is distinctly different from that in England.
Conclusion
It is clear from what we have discussed, Scotland and particularly Glasgow should be seriously considered by any investor looking for low-entry level, high-yielding freehold property. So if you wish to diversify your UK investment and require expert assistance from one of the UK’s leading specialist agents working with Chinese investors, contact Starfish Property Investments today for a no-obligation consultation. Or why not join our WhatsApp group to receive all the latest hot deals? Contact us now.
