In recent years, UK property investment guides have often echoed each other in telling people to shift their eyes from over-priced London towards the north. And while the property markets in many post-industrial cities in the North of England make for excellent investment opportunities, Scotland’s largest city, Glasgow, offers a uniquely attractive location for your property investment.
In today’s article we’ll take a closer look at what makes Glasgow such an exciting location for your property investment.
Growth in the Glasgow property market
It wasn’t that long ago that Glasgow was seen as a grey, post-industrial city with many areas suffering from deprivation, poverty and crumbling buildings. However, this image has slowly shifted in recent years towards a more lively, cool image that has made the city a popular home to students, creatives and tech entrepreneurs alike. It has a vibrant art and music scene, busy nightlife and the best shopping opportunities Scotland has to offer.
This, coupled with the city’s affordable house prices, makes the city a very attractive place both for living and investing: while the average house price in London has hovered around the £666k price point for the last 12 months, the same figure in Glasgow sits at just £179k according to Zoopla.
As for rental income, investors can expect a good yield, with the average rental yield sitting at an impressive 7.8% compared to the UK-wide average of 4%. Rents are also rising steadily in the city, with a report from last year highlighting a 2.9% increase in the average year compared to the previous year, compared to 1.7% across all of Scotland.
Since preparing to host the Commonwealth Games in 2014, Glasgow has experienced a great deal of regeneration in areas that in the past were considered undesirable for buy-to-let investors, such as those on the 20-mile long Clyde Waterfront.
Investing in Glasgow vs. Edinburgh vs. London
Edinburgh and Glasgow have been leading the charts for the fastest-growing property markets in the UK for a while now, boasting relatively reasonable house prices and rising rents.
In contrast, London has grown increasingly unaffordable and, frankly, overpriced for investors and renters alike in recent years. While the world-famous city is often the first place that overseas investors, in particular, think of when it comes to UK property investment, it’s no longer the most financially savvy option.
While Edinburgh and Glasgow are close geographically, there are many important differences for would-be property investors to keep in mind when deciding which city focus their attention on. Most importantly, while Edinburgh is Scotland’s capital city, Glasgow has a larger population – and as a result, a larger economy and property market, too.
Additionally, the barriers to entry are somewhat higher for would-be investors in Edinburgh, as the average house price in Edinburgh over the last 12 months was £287k in contrast with Glasgow’s £179k. In addition, house prices in Glasgow are among the fastest to rise in the whole of the UK.
Best Areas to Invest in Glasgow for 2021
There are many “up and coming” neighbourhoods in Glasgow, and by paying attention to upcoming development projects, public transport links and new services arriving into the city you can gain a better understanding of areas that may offer good opportunities for investment. And investing in property near a subway station is always a good rule of thumb in Glasgow, as this pushes up rents.
We have recently covered some of the best areas for buying property in Glasgow, but we thought we’d take a minute here to outline a few neighbourhoods in Scotland’s largest city that are especially well-suited for buy-to-let investors.
Some of the most promising neighbourhoods for property investment at the moment include Garnethill, Yorkhill and Partick, all of which border the popular West End but providing more affordable prices. This gives renters easy access to the many galleries and museums of the West End as well as the SSE Hydro and the University of Glasgow. Average rental yield in these areas is around 5-6%.
Additionally, Glasgow’s East End – often considered the run-down, “real” side of Glasgow – has recently experienced lots of regeneration, giving many of its neighbourhoods a more fashionable vibe. Average rental yields here are also around the 6% mark.
And while Southside has historically been less favoured by buyers and renters alike, it offers some unique investment opportunities. The riverside neighbourhood of Kinning Park is in high demand, with upcoming developments promising further growth in rental income for landlords in the near future.
Southside’s Govanhill is an affordable option for property investors, and especially renters looking for a flatshare are interested in this neighbourhood. Meanwhile, Shawlands has recently grown in popularity and become quite trendy, offering many stylish boutiques, popular eateries and ample green space. Rental yields here are around 4-5%.
How to invest in Glasgow property
In order to become a buy-to-let investor in Glasgow, you need to know about local taxes and regulations for landlords. In Scotland, you’ll pay Land and Buildings Transaction Tax (LBTT) instead of Stamp Duty when purchasing property and landlords have to join the landlord registration scheme, just to mention a few examples.
Websites such as Shelter Scotland can be useful resources, but especially if you lack strong personal experience in the Scottish property markets, the guidance of a property investment manager who is knowledgeable about this area is very valuable.
That’s where Cox & Co come in. We provide a turn-key service for both new and established property investors, acting as mortgage brokers and letting agents for our clients as well as assisting in the sourcing, buying and selling of their properties and advising them on the overall management of their property investment portfolio.To learn more about what we do, head over to our property investment service page or get in touch with us directly to find out how we can help you reach financial freedom.