The UK’s allure to overseas investors is no secret; what’s interesting is digging down into these trends to determine what areas of Great Britain attract which demographic of buyers. Take Scotland for example: in January 2018, Liquid Expat saw a 30% increase in enquiries from customers based in the USA looking for Scottish mortgage finance, compared to the same period in the previous year.
We took a closer look into this and asked: why are US investors snapping up Scottish property?
Rental yields that out-perform England and Wales
The most obvious driver behind US investor interest is rental yields, which averaged at 4.8% in December 2017 compared to 4.4% in England and Wales. And this is steadily increasing – by 1.7% year-on-year.
Overseas investors that do their research are well aware of the possible returns on Scottish property, particularly in areas like North East Glasgow where gross yields sit at 7.9%.
Free university tuition
However, not all of the interest in Scottish property is around buy-to-let (BTL) opportunities. The country has long been a popular destination for Americans, with enticing reasons to relocate.
One of these is free university tuition; we’re seeing parents keen to secure affordable higher education for their children snap up Scottish property. This gives them a Scottish address, thereby waiving the tuition fee and providing a place for their children to live during university.
The quality of life in Scotland a chief reason why some people choose to emigrate permanently. Britain boasts free healthcare; as investors look to plan retirement, it’s a good incentive to buy in the UK. Cities such as Edinburgh have an undeniable lure for anyone seeking a bustling place to retire.
Getting on the Scottish housing ladder
It’s worth noting that the process of buying Scottish property is slightly different to England and Wales. The seller of the property must present a report on the condition of the property and its value within the market to possible buyers, and the listing price is considered a place from which to start, rather than a point from which to haggle down – with sellers often expecting offers over that amount.
As a result, many properties sell for 10-15% above asking price. While this makes for a great investment, it also makes it crucial to factor higher prices into your plans when applying for a mortgage, especially as a US investor who might face stricter criteria.
Access our range of specialist lenders for expats and overseas investors looking to purchase property in Scotland. Our independent team of experts can guide you through the process of buying Scottish property, and maximise your chances of a successful application.