Investment in Scottish residential property is forecast to rise next year, despite ongoing concerns over the impact of Brexit and a second independence referendum.
In its latest investment review, specialist property group Rettie & Co said that the Scottish residential market enjoys “strong underlying fundamentals” that are likely to support growth in the face of the political uncertainty.
It added: “We anticipate average house prices to return to between 3 per cent to 4 per cent per annum through to 2020 and average rents to grow by 2 per cent to 4 per cent per annum.”
Amid “inflated” property values in London – where average house prices are now more than 60 per cent above 2007 levels and almost 30 per cent higher in real terms – Rettie & Co said that investors were targeting “the most attractive or viable deals” outside the south-east of England.
Scottish cities are still below peak levels in real terms, it pointed out, suggesting there was capacity for more growth as affordability remains comparatively strong.
In the private rented sector, which has more or less doubled in size across Scotland since 2007, the firm said that three of the UK’s highest gross rental yields are in Glasgow, Dundee and Aberdeen, at 7.2 per cent, 5.9 per cent and 5.6 per cent respectively. That compares with 4.3 per cent in London.
John Boyle, Rettie & Co’s director of research and strategy, said: “While there is undoubtedly uncertainty in the market regarding political issues, Scotland has strong underlying market fundamentals that are likely to support growth moving forward.
“We are seeing this on the coalface, as both UK and international investors are increasingly looking to do deals outside the south-east of England and Scotland is particularly well positioned to take advantage of this trend.”