Growing appetite

Property investment expected to rise in Scotland

Housebuilding is expected to rise

Landlords expect Scotland to attract the most residential property investment in the UK outside of London and the southeast of England in the next three years.

Research by accountancy firm RSM UK also indicated that Scotland will see an uptick in commercial property deals.

The findings may surprise those who say the current policies of the Scottish Government, such as rent controls, together with a suffocating planning system are deterring investors. It is said that up to £3 billion has been lost.

According to the RSM research 14% of landlords said Scotland would attract the most residential investment, compared with 7% in the 2023 study.

Forty-eight per cent said London would receive the greatest amount, followed by the southeast on 25%.

However, only 12% predict that access to funding will be easier in 12 months’ time, with further barriers including economic recession (53%), business rates (25%), global shocks (25%) and political instability (23%).

Claire Monaghan, partner and head of real estate and construction at RSM UK in Scotland, said: “The current economic environment is seeing renters stay in the rental market longer. With little support available to first time buyers and crippling interest costs this, coupled with a shortage of stock, is driving rental growth and attractiveness to investors with double digit growth being achieved consecutively across a two-year period in the living sector.

“Planning departments and local authorities have a critical role to play in ensuring progressive thinking and an appropriate pipeline.

“While purpose-built student accommodation appears to be the only show in town and often subject to criticism, the provision of such new stock frees up more traditional stock that is used to house students to meet wider housing demand.”

She added: “With the Scottish government scrapping its flagship target of reducing greenhouse gas emissions by 75% by 2030 and the publication of the new Housing Bill in Scotland, including proposals for long term rental controls, the sector is in a state of flux. Not to mention, the resignation of the First Minister, and further political instability with a looming election.

“What is needed is certainty to ensure that changes to sustainability targets and the implications arising from the Housing Bill don’t block investment.”

Glasgow top for student accommodation shortfall

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