Assetz® News - Booming Scottish housing market

Booming Scottish housing market

25th January 2006 |

A number of recent reports have highlighted the advantages of investing in Scottish property, as house prices are rising at almost three times the rate of those in the rest of the UK.

According to a recent report from the Bank of Scotland, Alexandria in Dunbartonshire and Coatbridge in Lanarkshire are currently the nation's property hotspots, with increases in house prices of around 35 per cent in both towns during 2005.

UK property investors have been quick to take advantage of the trend, with many adding Scottish property to their portfolios in anticipation of further growth in the coming years.

Despite the dramatic rises, the average cost of a house in Scotland is still only £113,169 and is unlikely to meet the UK average of £169,901 in the near future. As it continues to close the gap, however, savvy investors are increasingly looking for alternatives to the traditional English hotspots.

A report in the Scotsman today has suggested that Scotland's capital city is now following in the example of its English counterpart, with experts expecting an extraordinarily busy year in Edinburgh's property market.

Unlike London, however, price rises are expected to remain fairly stable this year in Edinburgh, which means investors will need to be more astute in their purchases as they look to make significant gains.

While house price inflation across Scotland now stands at a staggering 14.8 per cent per year, Edinburgh saw prices rise by a more manageable 3.66 per cent. A 6.4 per cent rise in the final quarter, however, may indicate that prices in 2006 are set for another hefty boost.

Speaking to the Scotsman, ESPC marketing director Simon Fairclough did not predict a specific figure for the year, but said he expected the recent market buoyancy to continue.

"What has happened is that we have the same factors that we had during the boom years of 2002 to 2003, but people have become more familiar with the conditions we had to put up with then such as high property prices," he said.

"The figures for the last quarter of 2005 are going to indicate that the first few months of 2006 are going to be pretty buoyant," he added.

Scotland also seems to be seeing a similar pattern to England in terms of the collective decision to return to the property market this year. Simon Rettie, marketing director from Rettie's estate agent, told the Scotsman that he is excited about the prospect of increased activity in the coming months.

"Last year people sat and watched and now they're saying 'Right, we're moving' and going for it," he said.

"We have had a very encouraging number of enquiries in the past couple of months and the first weeks of this year."

Currently, the rapid house price increases in Scotland are damaging the buy-to-let sector, with rental yields gradually falling throughout last year. Some experts have predicted that more moderate house price rises in 2006 will rejuvenate buy-to-let investment, with both sectors performing solidly by the end of the year.