Edinburgh, Scotland -- (SBWIRE) -- 02/06/2013 -- - Foreign investors deem Scottish residential rental property market recession proof
- Scots should take advantage of £80bn Gov Funding for Lending Scheme and invest
- Average house price in Scotland is £113,417 compared to UK average £161,346
Smart property investors from the Middle and Far East are taking advantage of Scotland’s static housing market according to property investment experts in Edinburgh.
Grant Property, operating from offices in Edinburgh and across the UK, has welcomed a number of new clients from overseas all looking to capitalise on Scotland’s “recession proof rental property sector.”
Peter Grant, CEO of Edinburgh head-quartered Grant Property says: “We’ve experienced significant growth in the investment side of our business. This is due to overseas investors returning to the buy to let sector showing that their confidence in the market has been restored. However Scots’ are not as quick to snap up great deals on their doorstep.
“There’s no denying that general investor confidence had been subdued due to the financial and Euro crises. However what has remained consistent throughout is smart investors’ bullish approach to buying to let. These people have kept their heads despite what’s being reported on European and global markets and have made their money as a result.
“To me and to these smart investors who have kept their cool, residential rental property in Scotland has remained recession proof.”
At the beginning of the financial crisis in 2008 property prices fell by around 20 per cent. Following the initial dip, prices rose by 10 per cent and have remained relatively static since.
The team at Grant Property believe that property is far more resilient and less volatile than any other stock because there is less risk attached.
A survey by the Royal Institute of Chartered Surveyors (RICS) in July 2012 showed that house prices across Scotland continued to drop last month (June) with 24 per cent more surveyors reporting price falls rather than rises.
These figures are not ideal for first-time-buyers trying to get their foot on the property ladder, however The Royal Bank of Scotland is now utilising the Bank of England’s Funding for Lending Scheme to cut mortgage rates for people in the UK. Details of the scheme were unveiled this month with the aim of providing banks with up to £80bn of cheap loans for customers in the form of business loans and mortgages.
The joint Bank of England and Treasury initiative is designed to protect banks from higher funding costs as a result of the Eurozone crisis, which will allow them to lend more.
At present – according to the Halifax House Price Index – the average house price in the UK is £161,346 compared to a Scottish average of £113,417. This price difference coupled by high occupancy rates in rental properties across major cities has made Scotland an attractive target for overseas investors.
“There is no recession in the rental market. Occupancy is at record levels, and we’re renting properties faster than we can take them on. Rents are rising year on year and 62 per cent of tenants expect rents to rise again in the next 12 months because there is a shortage of supply in the rental property market.
“Scots should look to mimic the behaviour of these overseas investors and make the most of what’s on their doorstep,” concludes Peter.
As of next month (August) banks will be able to access up to 5 per cent of their existing loan books through cheap funds, meaning that there will be more mortgage funds available for people in Scotland and across the UK to develop their own rental property portfolio in Scotland.
For further information on Grant Property contact the head office: 0131 220 6360 or visit www.grantproperty.com
About Grant Property
Grant Property is an ARLA registered letting agent and specialist in helping people invest in residential property.
The company has an unrivalled track record in providing property management solutions to landlords based both within the UK and overseas.
Since its inception in 1997 founder Peter Grant, along with wife Colette have built the company from the ground up. The duo developed the organisation based on an ethos of stepping into the customers’ shoes and delivering a service suited to their individual needs.