Over the last few years the Scottish property market has been under intense scrutiny with the ruling SNP party intent on taking Scotland independent. This has caused significant friction with the UK government and while the next independence referendum could be some way off, the Scottish property market does have its attractions in the longer term.
Independence within the European Union
There is still a core element of the Scottish voting public who will push for Scottish independence in the short, medium and longer term. Many believe that it is almost inevitable that Scotland will become independent and with the current government very keen on staying within the European Union this could be extremely beneficial for Scotland going forward. We have already seen a number of financial giants looking towards the likes of Dublin if London is left out in the cold. It would not stretch the imagination to see many financial giants looking towards Scotland if it was to gain independence as a part of the European Union.
Oil and gas industry
Time and time again we hear downbeat statements regarding the oil price and the gas industry. At this moment in time Aberdeen is still struggling from the recent collapse in the oil price but there are signs of a recovery which are feeding into the local property market. It would be fair to say that an independent Scotland would depend on its oil and gas resources in the early days but we have seen significant investment in green technology. In many ways Scotland has the perfect terrain for the likes of windfarms (onshore and offshore) together with tidal power. However, despite various downbeat research notes the oil and gas industry still has many decades left and would help to fund an independent Scotland.
In direct contrast to England and other areas of the UK, the Scottish government has been extremely welcoming of visitors from the European Union both temporary and permanent. This has led to a flourishing population in Scotland which will help to support a growing housing market and long-term economic growth. Edinburgh is still recognised as the financial capital of Scotland and houses some of the most expensive properties in the country. Recent tweaks to the property tax system have not gone to plan but there is scope for further changes to the long-term benefit of the Scottish housing market.
Scotland has for many years been a tourist hotspot with Americans seemingly intrigued with the history, culture and the landscape of Scotland. Even though the Scottish government’s brief dalliance with President Donald Trump did not go exactly to plan it does show the esteem with which Scotland is held across the world. There are some who believe Scotland will flourish better as an independent nation, it will be able to promote itself better than the UK government but time will tell. The Scottish tourist market at the moment is still extremely strong and the devaluation of sterling has only helped this.
Relatively cheap housing stock
Aside from the likes of Edinburgh and to a lesser extent Aberdeen, there are some extremely good value property markets across Scotland. Recent research notes have highlighted areas of Scotland which offer exceptional value for money on a UK wide basis. There are opportunities for double-digit buy to let rental yields, long-term potential for capital appreciation as well as significant land development sites. As the Scottish economy and population continues to grow in the longer term so we will see more demand for housing, both social and private, which bodes well for the future of the Scottish housing market.
It would be fair to say that Scotland will have its challenges if it was to go independent, or even if it remains part of the UK, but Scottish property does have many attractions for investors. The Scottish property market has in recent times under performed the wider UK market but for many it is the uncertainty surrounding independence and friction between the Scottish and UK government which has caused this. Once these issues are resolved once and for all, the clouds will lift, the economy will strengthen and a growing population all bode well for the future.