At this moment in time many investors are sitting on the sidelines watching the Scottish independence situation develop. On one hand we have UK government adamant that the 2014 independence referendum was a “once-in-a-lifetime” event while the Scottish government is using the recent Brexit vote as a potential reason to call another independence referendum. So, just over 24 months after the last referendum the Scottish economy is being held to ransom and property prices are starting to suffer.
There may be some interesting buying opportunities for those looking towards Scottish property with the likes of Edinburgh acutely impacted by economic and political issues. As if the politicians have not learned their lessons from 2014, with another referendum hovering above the economy it seems that some businesses are now starting to hold back on future investment. This is starting to have an impact on property prices but at the end of the day what does the future really hold for Scotland?
No support for independence
While the yes voters have been very vocal in relation to another referendum for independence the fact remains that a relatively small majority would still vote in favour of remaining part of the UK. This is despite the fact that Scotland voted in favour of remaining part of the European Union in the recent UK Brexit vote. As we have seen in the UK, headlines are starting to impact sentiment in Scotland and savvy investors on the sidelines are waiting with bated breath for their next buying opportunity.
It was also interesting to see that over the last few days the likes of Royal Bank of Scotland have suggested that an independent Scotland would not house the company’s head office. Indeed there is talk that the Royal Bank of Scotland will be moved lock stock and barrel to either England or Germany depending upon the U.K.’s future relationship with the European Union. Again, this uncertainty is not good for the general wealth of Scotland and political focus upon independence, Brexit and other non-economic issues does not help in the short term.
The currency issue is yet another red herring because if Scotland leaves the UK (and joins the European Union) then it will need to adopt the euro and if it remains part of the UK it will obviously use sterling. Talk of a Scottish pound is premature in the extreme and again while causing concern and confusion amongst investors could prompt yet another buying opportunity for those with a longer investment horizon.
The price of oil has collapsed over the last two years and indeed after a recent partial recovery is again under pressure. This has had a major short-term impact upon property prices in areas such as Aberdeen which is heavily dependent upon the oil industry. It is debatable as to whether oil will ever recover to in excess of $100 per barrel but ever-growing scepticism could yet create more buying opportunities in Aberdeen and the surrounding areas.
Savvy investors with one eye on Scottish property will be looking longer term to a time when the political upheaval and name-calling has ended. Scotland will eventually be either part of the European Union or part of the UK union with significant financial support. So, there is a growing belief that perhaps a short-term weakness in demand for Scottish property could turn out to be a godsend for those able to look beyond the short term bickering and confusion.