If you’ve never thought of investing in buy-to-let before, now’s the time and Glasgow’s the place. Right now entry costs are significantly lower than other key UK cities. Our recent Lettingstats report highlights that house prices have actually dropped. In fact, the average house price is about 17% below the Scottish average.
While the costs of investing in buy-to-let in Glasgow are proportionately lower, rents there have risen by 6% to 8% for smaller properties and just over 20% for 4 bedroom properties. Flat house prices and rising rents have made for increasingly attractive gross rental yields in Glasgow – to the point that investment opportunities are now comparable with what’s being achieved in hot-spot Aberdeen.
It’s a market that looks set to grow. The number of households in Glasgow is projected to expand 26% by 2035. Glasgow has a large student population (around 45,000), a growing resident population and a growing workforce. Businesses are attracted to Glasgow’s available labour force, relatively low cost base, efficient public transport system and niche provisions in administrative and back office functions. Around 16% of all households in the city now live in the private rented sector, more than double the proportion it was 10 years ago.
Strong demand and weak supply are further favourable conditions for investing. Forecasts indicate that rent levels in the city will continue to rise and, most likely, outpace house prices over the next few years.
While rental growth traditionally has been particularly strong in City Centre and West End, there are strong signs other parts of the city are benefitting from a growth in the rental market as well, including the previously less affluent north.
The buy-to-let opportunity might not be grabbing headlines yet, but it appears that the city’s old marketing slogan could apply to its attractiveness as a buy-to-let investment, particularly for the uninitiated: Glasgow’s miles better.
To download a copy of the Winter 2013/14 Lettingstats report CLICK HERE