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More landlords predict Scotland will attract the most residential property investment outside of London and the South East in the next three years, according to RSM UK’s Real Estate 360 survey.
Research commissioned by leading audit, tax and consulting firm RSM UK shows that 14% of landlords believe Scotland, will attract the most residential property investment in the same period after London (48%) and the South East (25%), doubling from 7% in 2023.
Scotland also edged into the top five regions for commercial property investment, with 12% of respondents expecting Scotland to attract the most commercial investors, a slight uptick (3%) on the previous year.
In addition, 43% of respondents think that the residential/private rental sector will see the most growth over the next 12 months, followed by student housing (24%), and industrial/logistics (20%).
The majority (82%) agree that real estate businesses need to have strong environmental credentials or plans in place in order to access financing from lenders, yet more than a third of landlords (35%) see access to funding as the second highest barrier to investment.
Additionally, only 12% predict that access to funding will be easier in 12 months’ time, with further barriers including economic recession (53%), business rates (25%), global shocks (25%) and political instability (23%).
Claire Monaghan, partner and head of real estate and construction at RSM UK in Scotland, says: “Investors have the opportunity to support in increasing housing supply in Scotland. The current economic environment is seeing renters stay in the rental market longer. With little support available to first time buyers and crippling interest costs this, coupled with a shortage of stock, is driving rental growth and attractiveness to investors with double digit growth being achieved consecutively across a two-year period in the living sector.
“Planning departments and local authorities have a critical role to play in ensuring progressive thinking and an appropriate pipeline. While purpose-built student accommodation appears to be the only show in town and often subject to criticism, the provision of such new stock frees up more traditional stock that is used to house students to meet wider housing demand.”
She adds: “With the Scottish government scrapping its flagship target of reducing greenhouse gas emissions by 75% by 2030 and the publication of the new Housing Bill in Scotland, including proposals for long term rental controls, the sector is in a state of flux. Not to mention, the resignation of the First Minister, and further political instability with a looming election. What is needed is certainty to ensure that changes to sustainability targets and the implications arising from the Housing Bill don’t block investment.”
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