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.

This unique circa 1900 building in Leicestershire’s Welland Valley will be taken ‘back to brick’ and remodelled internally as three new, high specification homes.

The central kitchen/toilet block will be next to be removed, ready for the final structural calculations inspection.

Check back regularly to follow the progress as it happens.

#LeicestershireProperty #PriorApproval #ChangeOfUse #PermittedDevelopment #PropertyConversions #DevelopmentFunding

The site has been secured and the main contractor has begun pulling down the partition walls and aged plaster and lath ceilings. This will open it up to form the large, ‘front to back’ open-plan ground floor spaces for the individual units.

We eagerly await the removal of the central kitchen and toilet blocks, which will create the largest of the 3 units totalling 2,101 sq ft plus 615 sq ft cellar.

#PermittedDevelopment #CommercialToResidential #PubConversions #PropertyDevelopment #CommercialFinance #ConservationVillage

Current Challenges

This is a potential minefield, particularly with conversions, typically involving many labour hours of sealing and masking with no guarantee of success at the new required levels. Once all cut outs have been made at first fix stage for downlights, light switches, sockets and ventilation, much of a building’s heat loss is via these often overlooked escape routes. In fact an astonishing 40% of heat loss in the UK is due to poor air tightness.

The Solution

This aspect has been an important part of the design process on our current project, particularly with a view to achieving the highest potential EPC rating via all other conventional methods such as A rated combi boilers, app based controls and insulation. We will therefore be utilising a relatively new and little known technology which achieves air tightness at or above the required level in as little as 60 mins (subject to standard preparation procedures).

The Process

The system utilises a combination of pressure and automated ionised sealant stations, which find and seal all building envelope leaks up to ½ inch and as small as a human hair. This ingenious system effectively allows the sealant to self-guide to the edges of leaks, creating an airtight seal whilst providing real-time updates about the progression of the seal.

The building will be kept under pressure until the remaining atomised sealant has ‘overshot’ the goal air tightness level. This ensures the final test will beat any certification or Building Regulations requirements. An in-house certificate to verify your building’s envelope leakage is then issued onsite, guaranteeing a pass at the new required levels.

Please directly contact us if you would like to learn more.

#PermittedDevelopment #BuildingRegulations #DevelopmentFinance

Planning Application Process

The building will be converted into 3 no. dwellings: 2 x 3 bed and 1 x 4 bed with 2 master en-suites.

Planning was in our favour for both the change of use and the full planning application. Initial consultative comments, which proved very useful, were duly noted and applied in the only revision necessary. Only 1 ‘non-statutory’ condition regarding surface water drainage into the public sewer was required:

– Change of use application submitted 26/04, approved 30/05

– Planning application submitted 19/05, granted 09/07

Thanks To

We would like to extend our thanks to North Northamptonshire Council Planning Authority (Corby office) for their prompt attention and efficiency in dealing with this matter.

#PlanningApplicationPermission #PlanningApplicationProcess #SiteVisit&Assessment #Design&Access #North NorthamptonshireCouncilPlanningAuthority

Commercial To Residential Conversion

This former pub & restaurant will be converted to form 3 no. dwellings (2 with cellars) and finished to a high specification in keeping with the building and location.

Thanks To…

A huge thank you to our incredibly dedicated design team at Lloyd Harden Design who worked tirelessly to achieve the best overall layout for the units and Paul Smith at JS Structural Consulting Engineers for the excellent job on the structural calculations.

We look forward to construction works commencing imminently.

#PermittedDevelopment #PropertyDevelopment #CommercialToResidential #PropertyConversion

However any landlord with at least a decade (or two in Tim’s case) of experience will usually have at least one story to tell which has been, shall we say, a challenge.

Just An Ordinary Street… Who Would Have Known?

2023 saw just such a challenge for a property Tim has owned since 2007.  This 3-bed detached house with 2 reception rooms and large rear garden sits in a very quiet, tree-lined avenue in an average town in North Northamptonshire.  Having been rented to the professional tenant for 3 years with an exemplary payment record, all communication suddenly ceased along with the monthly rent payments.

Mind Your Head – The Ceiling Is Coming Down

On gaining access to the property, it appeared the lead tenant had long since departed leaving access to what we might refer to as ‘other professionals’.  In what appears to be a very short time period between inspections, this unremarkable property had been converted into an organised cannabis production facility.

All upstairs bedrooms had been converted for the growing of the plants with full ventilation systems cut into the ceilings. Adjustable heat lamps were hung from the ceiling and large, water vats sat in each room for the plant irrigation system. All windows had been sealed up and the property kept at a consistent 30 degrees.  The unofficial occupants had conducted themselves in a polite and low-key manner with none of the immediate neighbours having any knowledge of what was taking place in their street.

It’s All Legal!

On reporting the matter to the police, the officer who attended advised that in fact, none of the equipment present was illegal to sell, buy or own and that anything with street value was already gone (or sold).  This left Tim with the full responsibility for removing all items and of course, restoring the property for normal use once again.

Follow this blog for updates on the progress of the incredible transformation from cannabis den to high quality social housing.

#TenantsFromHell #BuyToLet #SocialHousing #LandlordAction #LegalPossession #SectionNotices #RefurbishmentProperty

Our Latest Projects

2023 has been particularly active seeing the acquisition of two new development sites with a GDV of approximately £4.7m. Both sites involve the conversion of former commercial buildings into luxury, residential dwellings.

Project One – Northamptonshire

The first will be the conversion and extension of an existing 4,025 sq ft building into 3 no. three and four bed houses totalling 5,581 sq. ft. with a GDV of £1.7m. Completion for this Leicestershire conservation village site is scheduled for Spring 2024.

Project Two – Lincolnshire

The second site will involve the conversion of an existing 5,000 sq ft building set on 0.7 acres into 4 no. two and three bed houses and an additional 8 no. two and three new-build houses with a GDV of approximately £3m. Completion for the entire site located on the edge of the Lincolnshire Wolds (an Area of Outstanding Natural Beauty) is scheduled for Spring 2025.

Keep an eye on our upcoming blogs to follow the journey as these projects start to progress and don’t worry, we’ll continue to keep offering the finest UK investment properties in the meantime!

Latest Social Housing Property

Social housing, which includes asylum seeker accommodation, is becoming increasingly popular with investors who have become frustrated with the challenges of owning buy to let and HMO properties. Investing in the right property managed by one of the UK government’s largest social housing providers can offer stable returns, whilst mitigating against the rising costs associated with UK property investment.  What exactly is social housing, how does it work and is it right for me as an investor?

What Is ‘Social Housing’?

The terms social housing and registered provider are defined in the Housing and Regeneration Act 2008:

‘Social housing includes low-cost rental (such as affordable rent properties) and low-cost home ownership. Registered providers of social housing include local authority landlords and private registered providers (such as not-for-profit housing associations, co-operatives, and for-profit organisations).’

Who Does Social Housing Provide Accommodation For?

For the purposes of this article, we will focus on the latter providers (for-profit organisations) providing housing specifically for asylum seekers.

According to the definition on refugee-action.org.uk, an asylum seeker is:

‘Someone who has arrived in a country and asked for asylum. Until they receive a decision as to whether or not they are a refugee, they are known as an asylum seeker. In the UK, this means they do not have the same rights as a refugee or a British citizen would. For example, people seeking asylum aren’t allowed to work.’

How Much Demand Is There?

According to figures published by the Office For National Statistics, overall migration to the UK in the year to June 2022 stood at 1.1m boosted by migrants from Afghanistan, Ukraine and Hong Kong. This resulted in net migration to the UK reaching a record high of 504,000.

With regard to asylum seekers, there were 72,027 asylum applications relating to 85,902 people in the 12 months up to September 2022. There is now a backlog of up to 150,000 asylum applications, a 74% increase on the previous year.

The figure below illustrates the growth over a 10 year period of asylum seekers housed in the UK, which was nearly 64,000 as at Sep 2021:

Source: migrationwatchuk.org

Why Is Social Housing Important?

In order to provide an urgent solution to this growing issue, the UK government awarded both Mears Group and Serco Group with £2.9 billion to provide accommodation for asylum seekers.  By allocating these social housing funds to housing and property service providers, this sector is expected to transform, improve and strengthen. The new Asylum Accommodation and Support Services Contracts (AASC) were put in place to assist people through the asylum process and provide access to professional support.  These new contracts are designed to improve the asylum system in building a higher standard of social housing for vulnerable individuals in the UK. Social housing providers now have a duty to ensure that rigorous maintenance checks are carried out regularly, reporting back any issues to the Home Office once inspections are completed.

Is Social Housing Different From Residential Property?

Generally not. Standard residential houses containing 3 to 4 bedrooms are typically converted into 4 or 5 bedrooms with a downstairs 2^nd reception also used as an additional bedroom.  This means up to 6 bedrooms can be created whilst maintaining a communal lounge and kitchen.  Most properties will contain at least 1 main bathroom and separate WC/shower room. Walking down an average street, it would be impossible to tell if a house was operated as social housing or was owner-occupied or rented privately.

Who Will Manage The Occupants?

Unlike buy to let or HMO properties, the landlord will not deal directly with the occupants.  It is in fact the housing provider who will be your ‘corporate tenant’ and you will deal only with them. Your lease agreement and contract are directly with them and they are wholly responsible for the payment of rent to you every month.  This contractual commitment applies no matter whether the property is fully occupied, partially occupied or vacant during the term of the lease.

Are There Management Fees?

No. This is one of the major advantages and cost savings when compared to other types of property investment. Management fees are typically 12% including VAT in the UK so you are losing a significant amount from your gross income under this model. Social housing is managed entirely by the provider and no fees are charged to the landlord.

What About Running Costs. Won’t There Be Lots Of Maintenance?

This is one of the distinct advantages of social housing for landlords. Generally speaking day to day internal routine repairs and maintenance are the responsibility of the housing provider including boiler repairs. This means a dramatic saving can be made for all the usual repairs encountered year to year on other types of property investment. It is of course important to read the lease in detail so you understand what responsibilities lie with the landlord (typically structural and external repairs) but these are typically less frequent or common.

Will There Be Any Other Ongoing Costs?

The landlord is responsible for the cost of the annual gas safety certificate (approx. £100) and the 5 yearly electrical safety inspection (approx. £150).  These are usually arranged by the housing provider at preferential rates and charged to the landlord for added convenience.  You will also need to ensure the building is sufficiently insured as this a requirement of the lease.

What Are The Risks?

The risk for the investor purchasing an already established social housing property relate to the premium they will pay over and above the underlying asset value, much like an HMO. That is to say, the capital value of the property will be determined by the existing rent much like any commercial property (offices, retail etc.). This premium paid when compared to the ‘house next door’ will also take the conversion, development and compliance costs into account.

How Long Is The Lease?

Initial leases with the providers mentioned above are either 5 or 6 years 11 months. There is an option to renew for an additional 3 or 5 years. This effectively means the lease may run for a period of 10 years and possibly beyond if both parties (landlord and provider) wish to do so.

At the end of the agreed lease your property will be returned to you in the condition it was provided, allowing for normal wear and tear.  It can then be sold, rented as a buy to let or lived in as you wish.

Can I Re-sell My Property During The Lease?

Yes, you my re-sell the property at any time, just as the current seller may. A new lease will be issued to the new landlord on completion.

Where Can I Buy Social Housing Property?

It would not be difficult search the internet for social housing to buy.  However, caution is advised as this is a specialised area of property requiring significant experience to evaluate whether a property represents value and just as importantly, is fully compliant.

You should therefore seek an established, experienced agent familiar with this sector who is able to present you with verified properties and advise on the process from reservation to completion.  They will also usually be able to refer you to trusted partners, such as solicitors used to dealing with social housing transactions (many are not) and insurance brokers (property occupied by asylum seekers requires the appropriate insurance).

View Social Housing Examples:

5 Bed Terrace House in Preston

5 Bed Terrace House in St Helens

4 Bed Terrace House in Blackburn

4 Bed Terrace House in Liverpool

4 Bed Terrace House in Nottinghamshire – Coming Soon!

4 Bed Terrace House in Ellesmere Port (near Liverpool) – Coming Soon!

For more examples, please type ‘Social Housing’ on Property Search Bar

Conclusion

With more and more households struggling to cope with huge energy price increases, landlords are becoming increasingly concerned about their tenants’ ability to meet their rent payments in full and on time.  Social Housing offers a clear way forward to continue investing, whilst enjoying fixed income rent with no tenant affordability concerns or worries.

What Is A Property Sourcer?

A property sourcer is an individual or company who assists clients in finding a suitable investment or self-use property to purchase. They will typically conduct all negotiation and communication with the seller on their client’s behalf, providing a personalised and efficient buying transaction.

What Does A Property Sourcer Do?

This will vary depending on the property sourcer but will usually include providing property opportunities but may also include a number of additional purchaser services such as:

• Property details verification
• Due diligence (location, investment return, capital growth etc.)
• Viewings
• Price negotiation and offer submission
• Survey arrangement
• Solicitor referral
• Lettings and management referral
• Tax advisor and accountant referral

How Much Does A Property Sourcer Charge?

The current range of fees charged by UK property sourcing agents is typically £2,500 – £5,500, however this will vary depending on the property sourcing agent in question.

Whilst this may seem like a very wide range, fees charged by an experienced property sourcing company will be higher than those charged by a less experienced individual or sole trader. This will not only be due to the property sourcing company’s level of expertise, experience and established reputation but will also reflect its costs in running its business in a compliant manner.

This may include:

• Registered company offices
• Staff
• Industry memberships including consumer protection bodies
• Anti-Money Laundering registration
• Business insurance
• Website and marketing costs

Benefits Of Using A Property Sourcer

There are many benefits to using an established, professional UK property sourcing agent particularly if you are an inexperienced investor, first time buyer or an overseas purchaser. A good property sourcer will be able to provide you with a range of properties for consideration and provide guidance and assistance in selecting the right property for you. They may also have access to opportunities not available on the open market, allowing you to secure property you would otherwise not have access to.

Other benefits include:

• Immediate access to properties
• Off-market deals
• Negotiation and offer assistance
• Hands-off purchase transaction
• Research and due diligence services
• Referral to trusted professional network
• Local representation

Risks Of Buying From A Property Sourcer

There are of course potential risks involved in using a UK property sourcing agent.

The sourcing industry has many inexperienced, unregistered and non-compliant individuals and sole traders acting as ‘professional’ property sourcers. Paying fees to an individual without any business registration or compliance can result in great difficulty in the event of a dispute you are unable to resolve with them directly.

The most common complaint for those unfortunate enough to have dealt with an unprofessional property sourcer is that of sourcing fees which are not refunded for a deal which has not been delivered. Lack of communication when issues arise is usually the second most common complaint. In extreme cases, you may even find yourself having paid a sourcing fee for a property which may not even exist.

Paying close attention to the above will help you to avoid:

• Non-deliverable or non-existent deals
• Reliance on non-compliant sourcers
• Lack of accountability
• No recourse to third-party dispute resolution bodies
• Fees withheld in the event of disputes or non-performance

FAQ’s

Should You Buy From A Property Sourcer?

Using a property sourcing agent can accelerate your property purchase. It will it give you immediate access to properties and confidence in the knowledge the property and location have been thoroughly researched. A guiding hand through the purchase process from reservation to completion are also key factors. In summary, this will save you both time and money and can provide a hassle-free option for purchasing your UK property.

Is Property Sourcing Legal?

There is no legal restriction to a property sourcing agent acting on your behalf. This is usually in a consultancy capacity, with the sourcing agent helping to advise clients on the options available in the market. They are however not typically authorised or regulated to give investment advice. The property sourcing agent should also be registered with HMRC’s Anti-Money Laundering initiative, the Information Commissioner’s Office and ideally one of the UK’s dispute resolution bodies as discussed earlier.

How Do I Find A Property Sourcing Agent?

Perhaps one of the best ways is personal recommendation. Many established property sourcing agents receive referrals from existing clients they have previously helped. You may also search Google using keywords which relate to the subject or your own specific interest (type of property, location etc.), which will help you locate the services of UK property sourcing agents you may wish to contact. You should pay close attention to the property sourcing agent’s website content and testimonials, which will help you decide if they are the right kind of agent for you.

Conclusion

Choosing an established, compliant UK property sourcing agent with a proven track record is extremely important and should be taken into consideration from the outset. This information should be clearly shown on the property sourcing agent’s website, email signatures or should be available on request.

Take your time to find a property sourcer with all of the above and one that genuinely understands your position and objectives. You should also look for one who responds to your queries in a timely manner and of course, one that you feel comfortable and enjoy dealing with. With this in place, a great property sourcing agent can be the key to finding your ideal property or profitable investment portfolio with the least amount of effort.

Starfish Property Investments is ideally placed to assist Chinese buyers make the right decisions.