We love Scotland. For starters, it has a rich culture, a breathtaking landscape, great schools, free healthcare, and short commutes. But don’t just take our word for it. A quality of life study by the European Commission, based on 50 indicators including employment rates, personal rights, health history and tolerance attitudes, found that published in October 2016 revealed that of the countries in the U.K., Scotland comes top!
And if Scotland is such a great place, that means it’s a great place to invest, right?
Property investors interested in Scottish opportunities tend to focus on the country’s two largest cities: Glasgow and Edinburgh.
Investing in property in Glasgow
Let’s start with Glasgow, Scotland’s largest city (and the third-largest in the U.K.). At one time the largest seaport in U.K. and one of its main hubs of transatlantic trade with North America and the West Indies, in more recent years its firmly established itself as one of Europe’s cultural hot spots, with most of Scotland’s national arts organisation, including Scottish National Opera, Scottish National Ballet and Royal Scottish National Theatre, based in the city. Other cultural sites include the Mitchell Library, one of the largest public reference libraries in Europe, Kelvingrove Art Gallery and Museum, the Burrelll Collection and the Gallery of Modern Art (GoMA). The city’s west end is home to the University of Glasgow: the fourth oldest university in the English-speaking world and boasting philosopher Francis Hutcheson, engineer James Watt, philosopher and economist Adam Smith, physicist Lord Kelvin, surgeon Joseph Lister, 1st Baron Lister, seven Nobel laureates, and two British Prime Ministers among its impressive alumni.
It’s not only the city’s 80,000 students who need rental accommodation. Glasgow’s booming economy attracts graduates and job hunters from all over the world. In 2014 the U.K. government and Glasgow council officials signed “The City Deal”, pledging to invest more than £1 billion into major infrastructure projects in Glasgow, a move that will boost the city’s economy for the next 20 years and create tens of thousands of jobs.
There’s no doubt that Glasgow has a strong rental market, partly due to the lower than average property prices making it more accessible. Between 2011 and 2016, the average Glasgow rent increased by 22.4%.
Investing in property in Edinburgh
If the east coast of Scotland is where you want to invest, let’s turn our attention to Edinburgh. The country’s historic capital city — famous for an iconic castle, an ancient volcanic rock and the Scottish Parliament — also has a high student population. It’s home to no less than four universities; the University of Edinburgh consistently ranks in the top 30 of global universities and its College of Medicine and Veterinary Medicine is reputed to be a world-leader in its field. Alumni include Charles Darwin, David Hume, Alexander Graham Bell and Sir Arthur Conan Doyle, among many others.
Edinburgh’s old, multi-bedroom properties are ideal for student rentals, but their original Victoria, Georgian and Edwardian features are attractive to any tenant or purchaser looking for a home with character.
With London increasingly seen as being too costly for many buy-to-let investors due to the high rate of taxation, Edinburgh — with the strongest economy of any U.K. city outside London — is a hugely attractive option. Property offers rental returns as high as 6.7% and, at an average of £984 per calendar month, the highest rents in Scotland.
Edinburgh has the highest rate of business start ups per capita in Scotland, with 88 businesses set up per year per 10,000 working age residents. As Edinburgh’s thriving tourism, tech and business industries continue to grow, so does its population! It’s estimated that the city’s population will grow by 4.5% over the next five years, which will put pressure on housing.
Besides Glasgow and Edinburgh, Scotland has many areas offering superb property investment opportunities. More on this soon!