Impact of the referendum on the Scottish property market

by Andrew H

12:59 PM, 10th January 2014
About 7 years ago

Impact of the referendum on the Scottish property market

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Impact of the referendum on the Scottish property market

Hi everyone,

Happy New Year.

With the Scottish referendum looming, I wanted to get people’s thoughts on what impact a YES vote may have on the Scottish residential property market.

Should this be an area of concern for investors looking to build a BTL portfolio over the coming years and what considerations should be made when planning?

Many thanks in advance for everyone’s thoughts. Impact of the referendum on the Scottish property market

Andrew


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Comments

Ian Ringrose

13:45 PM, 10th January 2014
About 7 years ago

Scotland already makes life hard for British investors by having its own laws etc, like anywhere else that does not consider itself part of the UK, I would not invest there.

However a local does not have the same issues, but do you want a mortgage in UK pound when you don’t know if the UK will allow Scotland to use the pound if there is a yes vote?

Andrew H

14:57 PM, 10th January 2014
About 7 years ago

Reply to the comment left by "Ian Ringrose" at "10/01/2014 - 13:45":

Hi Ian,

Thanks for your comment.

I'm a local (Edinburgh) but your comment re UK pound based mortgages is exactly the type of concern I have moving forward. There is a lot of uncertainty around the economic effect of Scottish independence and there seems to be little discussion about the potential impact for local property investors.

Thanks again for your thoughts and hopefully others will offer there views.

Richard Adams

15:23 PM, 10th January 2014
About 7 years ago

Reply to the comment left by "Andrew H" at "10/01/2014 - 14:57":

I have a Scottish property in my portfolio which I wish I had never bought but I'm stuck with it. In negative equity so can't sell and house prices are certainly not rising in the locality like elsewhere. It just about washes its face at present.

So what I want to know is will either a yes or no vote have any impact on the overall Scottish economic situation? Until that improves I'm stuffed. Where my "boner" property is the developer is still after five years to finish building everything they have PP for. They won't do so while the economy is depressed and apparently mortgages remain hard to get unlike south of the border. So the estate looking like a bombsite - still - does not help.

If there is a yes vote will the SNP introduce measures to stimulate house building?

Mark Alexander

12:42 PM, 11th January 2014
About 7 years ago

Reply to the comment left by "Ian Ringrose" at "10/01/2014 - 13:45":

Interesting points Ian, would they have their own currency or join the Euro as Eire did I wonder?

Given that most UK lenders will not touch Eire for mortgage lending I wonder whether the same would follow in Scotland if they got the Yes vote and also what would happen to existing mortgages?

If Scotland was to have it's own currency or use the Euro then that would also add an additional currency rate risk to existing mortgages which, I assume, would remain in pounds sterling.
.

Wendy Scott

18:12 PM, 11th January 2014
About 7 years ago

HI Andrew,

We are also looking to invest in Scottish BTL market but have decided to wait until after the Referendum because a YES decision will create too much uncertainly until all the details are ironed out eg what will happen with the currency, what will the banks do etc The potential impact on the Scottish economy could be significant and it's too much uncertainly for us as new investors into the market. We are hoping for a NO decision as we want to invest in Scottish property as we think it has the potential to be a good market, especially in Glasgow and Edinburgh.

We haven't found very much information on this either, so just going by a "gut feeling" to wait and see. I think the reason why there isn't much information out there is that no one knows what will happen!

Good luck!
Wendy

Ian Ringrose

18:52 PM, 11th January 2014
About 7 years ago

Even if it a “No” this time, what stops it being a “Yes” in 5 or 10 years time? Has the SNP make Scotland an area best avoided?

Wendy Scott

19:13 PM, 11th January 2014
About 7 years ago

Reply to the comment left by "Ian Ringrose" at "11/01/2014 - 18:52":

You have a point but I think we'll probably go for it on the back of a NO vote this year as it will take ages for a Referendum to be approved again. In the meantime, the UK Government could have done plenty to mess around with the markets in England and Wales too...no guarantees anywhere really!

Puzzler

20:41 PM, 11th January 2014
About 7 years ago

You need to do a lot of home work if you're just thinking of expanding into it as another area.

Scottish law is already different on many grounds for the PRS:

1. There is no differentiation between leasehold and freehold

2. All the notices to be served are different

3. No fees may be charged to the tenant

4. The differential between furnished and unfurnished still exists with regard to security of tenure

5. Landlords have to be registered with the local authority.

6. Inheritance law is also different, you cannot exclude your children as you can in England, if you are based in England you would probably need to have two wills one drawn up in each place.

That's just a few that I know of and before independence!

Wendy Scott

14:09 PM, 12th January 2014
About 7 years ago

Reply to the comment left by "Puzzler " at "11/01/2014 - 20:41":

Many thanks.

Andrew H

9:59 AM, 14th January 2014
About 7 years ago

SAL members:

Great article on this topic in SAL's recent edition of Landlord Focus -

https://www.scottishlandlords.com/Magazine.aspx

Page 5. Hover mouse over the sides of the pages and click to turn.

I would be interested to hear SAL's thoughts on this discussion.

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