Following the re evaluation of tenants’ priorities following lockdown – and a continuing of restrictions on those of us living in the central belt of Scotland – it appears that houses are currently in higher demand than flats or apartments both in Glasgow and across the rest of the UK. According to research from Howsy which looked at rental data across 22 major cities across the UK, demand for houses is currently at 29% whilst demand for apartments and flats is an average of 26%. Here in Glasgow the demand for houses is currently 59% with flats and apartments at 41%. The overall tenant demand currently stands at 42%. Regional variations show that Belfast was as much as 69% as tenants look for more inside space to accommodate home working and spending more time at home, and a need for outside space as for many people socializing in the garden is the only way they can see friends and family at home. However, there were some cities where flats and apartments remained the most popular option with Manchester showing the highest demand at 57% so for some major cities, the demand for apartments remains robust. As Scotland returns to some form of normality – which looks like next year at the earliest – demand for flats and apartments should increase, especially in university towns and cities. This will be welcome news for landlords. If you are looking for a house to rent register for property alerts. 

There is some good news for private tenants who are experiencing financial difficulties and unable to access certain benefits or support that will help them to meet their rental payments. A sum of £10 million has been allocated to the Tenant Hardship Loan Fund with details of who is eligible and how to apply will be announced soon, with the loan set to be accessible from November. An extra £3 million is being pumped into the Discretionary Housing Payment fund, which has been implemented in order to assist tenants already in receipt of benefits. The Discretionary Housing Payment fund was originally a £60 million budget set up to mitigate the impact of the bedroom tax in Scotland. It has now been increased by £19 million including the latest £3 addition. Scottish Housing Minister Kevin Stewart believes that these measures will ensure no one is left in a position where they cannot access support to meet their rental payments. During the same announcement, the Housing Minister extended the current ban on evictions (due to end on September 30^th) to March 2021. This means that regardless of the type of tenancy, or what kind of notice is served, or for whichever reason, all eviction proceedings will be placed on hold. The only exceptions to this are cases involving anti-social behaviour or domestic abuse. Find out more: Scottish government’s support for tenants.  

Since the UK came out of lockdown there have been reports that we are seeing a property mini boom: *Sales agreed data suggests a 13 year high for the market. Year-on-year, the number of sales per branch increased by 44%. *The number of house hunters registered per estate agent branch rose by 13%, increasing from 379 in June to 428. (Zoopla) *In July 2020 in the UK 8% of properties sold for more than the original asking price and year-on-year housing demand is up by a third. (Zoopla) *Year-on-year, housing demand is up by a third. *The post-lockdown housing market rebound shows few signs of slowing despite the UK going into recession, with the number of new sales agreed in August on Zoopla running 76% ahead of the five-year average. (Zoopla) *Buyer appetite since the start of 2020 is now 34% higher than the same eight months in 2019 and, despite the summer holidays, it remains unseasonably strong. (Zoopla) *More homes are coming onto the market, with the flow of new supply over the last month 50% up on this time last year. (Nationwide) *Edinburgh house prices rose by 3% and Glasgow 2.2% *During Q2 of 2020, average rents in Glasgow rose by 1.4% year-on-year to £810. Four bedroom properties experienced the greatest year-on-year increase in rents, rising by 3.1% to £1,858. (Zoopla) *The buy-to-let mortgage market is showing signs of recovery after the number of deals nearly halved during the early weeks of the coronavirus pandemic. The average cost of two-year and five-year fixed rate mortgages have also fallen slightly compared with March, to stand at 2.72% and 3.11% respectively. (Nationwide) How is this possible when house prices crashed in the last recession? It’s possible that this is because the recession we are seeing today has been driven by a health crisis wheras the last recession in 2008 was driven by finance. The Government chose to shut down certain markets whilst implementing measures to support businesses affected by the pandemic with incentives to boost the property market such as a rise in the Stamp Duty/LBTT threshold. So why is it still a good idea to invest in property? House price predictions from Savills shows that prices are expected to grow by an average of 15% by 2024 although London will see with just a 5% increase. Alongside house price rises, rents are also set to increase. Demand for homes is exceptionally high and this supply and demand imbalance is supporting the headline rate of growth with the time to sell a property falling since lockdown. With the stamp duty holiday set to end in 2021 it’s a great time to take advantage of this – although for investors the 3% additional property rate is still in effect. Aside from the financial analysis, socially nearly 40% of millennials are still renting at age 30 and a third of the wider generation are expected to rent into retirement. It’s also believed by the Resolution Foundation that UK renters will outnumber homeowners by 2039. What’s more, the UK population looks set to reach 74 million in 20 years, a sign that the house demand is rising. At present interest rates are low so you can secure a very competitive buy-to-let mortgage rate making the investment process more accessible. Finally, for foreign investors, the weakness of the pound continues to be an opportunity to save money long-term especially where the market here in Scotland is so affordable compared to the rest of Europe. Talk to us if you would find out more about rental values in Glasgow.  

  According to the latest House Price Index from the website ‘Home’, we can rest assured that there’s an optimistic outlook for landlords and buy to let investors across the UK. Across the UK there have been reports of rising rent and lack of supply – even though many Airbnb properties have come back to the market following lockdown. For this reason, reports show that supply is up by an incredible 30% compared to the same time last year. Whilst rents are rising across the UK, rent in London is actually falling and is currently down 5.2%. The report shows that in northern regions of the UK, annualised rises are around the 10% mark and this, combined with the capital gains to be had in these sales markets, there is likely to be further BTL investments. At present the value of the pound is relatively low and the Stamp Duty holiday – with the threshold raised to £500,000 in England and LBTT raised to £250,000 in Scotland, is a significant draw to property investors and in particular for foreign investors and expats. The Stamp Duty surcharge will go back to pre lockdown levels from April 2021 and so many people considering investment will bring plans forward and invest in the next six months.

Property investment can be extremely rewarding – both on a personal and professional level. It can give you financial freedom, a flexible work-life balance and surprising returns especially here in Glasgow where they are higher than anywhere in the UK. However, it can be extremely daunting so it’s important to do your homework first.

Buy to Let

If you are going to let your property – either privately or via a letting agent, you need a buy to let mortgage on your property. If you have a residential mortgage, you’ll need to talk to your lender about your plans. As a landlord with a buy to let property, you have several legal obligations and responsibilities that you need to be aware of.

Finance

You will need to ensure your finances are in good order and in place before buying an investment property. Talk to a mortgage broker about your plans and find out how much you will need to invest and whether you will be eligible for a buy to let mortgage. They will also set out any additional costs and fees.

Time

Do you have time to be a landlord? If not, can you outsource the management of your property to a letting agent? It’s important to be realistic about not only the time you have to spare, but whether you have the experience and knowledge to undertake the running of your investment property.

Location

When buying a property to let out, it’s important to do your homework and find the right area. Are you going to buy a property where you live or are you going to buy it in a city centre, close to a university or in an area popular with young professionals. The type of property you buy has to marry with the location – there’s no point in purchasing a luxury flat in a student area nor a family home where there are no good schools. You’ll also need to decide on the type of property within that location – new build, off-plan or resale. You may even decide to visit the local auctions – but we strongly advise only doing this if you have had sound advice first. Talk to your local estate agent about rental values, the types of renters in the area, transport links, schooling and amenities. Get the advice from several agents.

Your return on investment

Rental yield and capital growth are the two ways that you can increase your return on investment. Take a look at the differences here. (link to existing blog) If you are a first-time investor, we hope you’ve found this information helpful. If you have any questions, please don’t hesitate to talk to us.

If you are a tenant here in Scotland, you have a number of rights to protect you and the property in which you live. Here are some of the things you should be aware of as a private tenant: You have the right to live in a safe property that is in good condition. You have the right to live in a property undisturbed, without any unreasonable interference from your landlord or letting agent. You have the right to know the energy performance via an Energy Performance Certificate. Your tenancy deposit will be protected in a government approved scheme. It must be registered with Letting Protection Service Scotland, Safe Deposits Scotland or mydeposits Scotland. You have the right to challenge rent increases that you believe to be unfair. There is a strict legal process that governs when landlords can increase your rent. It can be increased once per year, you will need to be served with a Rent Increase Notice which includes a three-month period before the rent is increased. If you feel it is unfair, you can apply to Rent Service Scotland. You have a right to protection from unfair eviction. If you have a private tenancy your landlord can only evict you for a specific reason as outlined here and it must be stated in writing. Your notice period depends on the reason behind your eviction but in some cases, it can be up to six months. If your landlord ends your tenancy and you refuse to move out, your landlord can only recover possession through court proceedings. If you think you’re being evicted unfairly you can defend this action via a tribunal. It is a legal requirement for tenants to receive a written tenancy agreement called the Private Residential Tenancy Agreement and all landlords are required to register with the local council that covers the area where the property is located as part of the Scottish Landlord Register. Landlords are required to provide information on themselves and the letting agent managing the property (if applicable).

Eviction during COVID-19

Updated guidance on evictions during the pandemic has been issued by the Scottish Government. This includes an extension of the notice period for evictions of 6 months. A new law has made all grounds for eviction discretionary, allowing any tribunals to consider the impact of coronavirus before issuing an eviction order or not. If you require any further help as a private tenant, or you're looking for a property to let, talk to our friendly, professional team today.

The return of the housing market has seen demand for rental property boom - with data from Rightmove showing activity in the first week since the lockdown in England eased, with rental demand on the portal registering at its highest ever in its 20 year history. There is a strong possibility that this will happen in Scotland.

The Government has issued guidance to estate agents, buyers and sellers that more activity should be done online if possible. The new guideline document states "The process of finding and moving into a new home will need to be different given those involved in the process will have to adapt practices and procedures to ensure that the risk of spread of Coronavirus is reduced as far as possible” This 'new normal' will including much of the home seeking and viewing process taken online, including virtual initial viewings. The document also states that “We encourage people to do the majority of their  property searching online … To support this agents may ask home occupiers to conduct virtual viewings.” In relation to new-build property sales it advises: “Where possible, developers should promote virtual viewings.” And for conveyancers the guidance says: “Conveyancing should aim to conduct as much of their business remotely as possible. The rest of the guidance concerns social distancing, surface-cleaning and hand-washing, including agents being requested to avoid  contact with clients showing symptoms or having been advised to self-isolate, appointment viewing systems, stopping open-house viewings, enforcing 2m social distancing between individuals, clients making their own way to appointments, providing hand sanitising facilities and increasing ventilation by keeping all internal doors open during viewings. See the full guidance. At Newton Letting we will be undertaking all relevant changes to our business practices to adhere to the new rules that will come into force here in Scotland.