Scotland's Strong Rental Market

2008 may appear to have had a pessimistic start in the United Kingdom, with volatile markets and negative headlines forcing down consumer confidence. However, an accelerated demand of rental accommodation, particularly in up-and- coming growth areas such as Glasgow and Leeds, has been pushing yields and capital appreciation higher.

Property in Scotland continues to see positive figures despite many potential property buyers choosing to rent for the time being. The Scottish rental market saw high levels of activity throughout 2007 and particularly in the last quarter, says a report recently published by UK lettings website, citylets.co.uk. Tenant demand has grown even stronger since the new year begun, with citylets.co.uk registering a 41% increase in visitor numbers compared to January last year. The report explains that, “We expect that strong tenant demand will remain a feature of the first quarter of 2008 and possibly longer if the next interest rate cut fails to boost confidence”.

Glasgow has become the prize in the Kinder Egg as monthly rents have continued to edge higher, averaging at £561. An increase in yields is always an interesting fact for those considering rental investment property in Scotland but, how long will it take to rent out the property?  Here too, we see positive figures, with Citylets' report confirming that in Q4 2007, not only did volumes of letting increase but 54% of all properties marketed were rented within a month, and 14% within a one week period. The rental portal goes on to explain how, “Given both higher borrowing costs for landlords and the increase in demand for rental property we expect to see a similar increase in the next quarter.”

The Independent newspaper also published interesting figures in January: “Students are attracted to Scotland by the free tuition – good news for buy-to-let investors in particular – while the perception that Scotland is enjoying a better standard of living than the rest of the UK has started to be reflected in the figures.”

Nationwide’s economist, Martin Gahbauer, predicts Scottish property to be the smartest place to put your money in 2008: “Scotland is bucking the trend, with prices still rising at a rate of 10% a year. Scotland has enjoyed fewer boom cycles than the rest of the country, and this steadier growth will continue to benefit prices over the next year.”

Award-winning projects such as GH2O prove to be the best bet for property investors, according to the International Property Investment Network (IPIN).  Situated on the quiet banks of the River Clyde, this residence is a highly desirable address for young professionals as it is conveniently positioned between the city centre, retail and leisure areas.
The project is part of the regeneration of Glasgow’s Clydebank area, which will include the creation of a new metropolitan environment consisting of residential, commercial, retail and leisure districts. Some of the projects already completed are: Radisson SAS Hotel, Argyle Street, Glasgow, Telford Drive, Edinburgh and Bewleys Hotel, Glasgow.
According to Gareth Milton, Head of Operations at IPIN, “This stunning addition to Glasgow’s skyline offers a choice of 15 modernistic apartment styles, and the project itself has been designed to ensure that 80% of these units enjoy direct views over the River Clyde. Following our extensive research and due diligence procedures, we believe GH2O offers a combination of great rental potential within a city experiencing continued economic growth.”