As we head into 2015, the Scottish private rented sector is attractive to both property investors and tenants.
Summary:
• The vast majority of private sector tenants in Scotland are happy with their rented home
• However concerns do exist that home supply with fail to keep up pace with tenant demand
• The student accommodation market in Scotland is currently one of the most undersupplied in the country
With the Scottish property market returning to prominence following the outcome of the independence referendum, investor attention is shifting north of the border.
Recent research showed that house prices in the country are rising at a faster pace than throughout most of 2014 and now a new study suggests that Scotland’s private rented sector also offers the potential for long-term stable rental returns.
Although 95% of Scottish tenants have never been unreasonably asked to leave their home, tenants are concerned there will be a lack of properties to let in the future, as only 42% are confident of finding another suitable home in what is now an undersupplied market.
This suggests that buy-to-let property investments in Scotland will benefit from high levels of tenant demand throughout 2015.
Lettingweb explained that there has been long-term growth in the Scottish private rented sector, as it has doubled in size over the past decade as more people search for affordable, high-quality property to let.
Dan Cookson, Head of Research at Lettingweb, said: “More needs to be done to bring greater investment into the sector to meet that demand, and widen confidence that alternatives are available.”
One particular section of the Scottish buy-to-let market that is structurally undersupplied is student accommodation. Scottish universities offer many of their students free tuition, which means that there is always strong and ongoing demand for places – especially at the country’s more prestigious institutions in Glasgow and Edinburgh. Investors with purpose-built student accommodation in these cities are likely to find that their properties let year after year, while benefitting from the strong capital growth seen in the wider market.