24 May 2017
Glasgow’s suburbs are predicted to see the largest increase in average house prices in Scotland by 2021 according to new research released today (24 May 2017), the Barclays UK Property Predictor.
Affluent areas in Glasgow’s outskirts, East Renfrewshire and East Dunbartonshire, are set to rise by almost a quarter (23.8% / 22.5% respectively) over the next five years. Hot on its heels is City of Edinburgh (20.2%) and Scotland’s central belt hotspot, Stirling (19.1%).
Over the next five years, high employment rates, growth in private housing market levels and an increase in rates of average earnings will contribute to rising property prices across Scotland. The country is expected to see an overall average increase of almost 6% across the next five years, making it the fifth highest performing region across the UK, behind London (11.88%), East of England (9.38%) the South East (8.74%) and the Midlands (6.28%).
The Barclays UK Property Predictor provides a three-to-five year forecast of investment hotspots on the residential property market, revealing the areas across the UK where house prices and rental incomes are expected to rise. The research uses factors including rental trends, employment levels and commuter behaviour as well as current house prices to create an index of property hotspots. The research also surveyed high net worth investors from across the UK, to reveal where and why they plan to purchase property in the future.
According to the research, and despite an uncertain economic and political climate, the UK property market remains buoyant with prices in areas across the UK set to rise by an average of 6.1% by 2021, bringing the average value of a UK property to almost £300,000.
Predicted to see the biggest property price increase in Scotland is Glaswegian suburb East Renfrewshire, the only destination in Scotland to rank within the top 20 areas of highest growth across the UK behind Westminster (31.9%), Cotsworld (31.8%) and Warwick (29.5%).
East Renfrewshire has long been considered an ideal place for aspiring young families to set up home. Up-market retailer, Whole Foods, opened its first Scottish store in Giffnock, while Newton Mearns and Clarkston are typified by excellent schools and high house prices. There is also a high proportion of highly qualified residents in East Renfrewshire, with 53% of the population educated to degree level or higher. These qualifications are linked to higher potential earnings and a related upwards pressure on housing prices.
Similarly, East Dunbartonshire, situated north of Glasgow, has ranked second in the Scottish regions and is expected to rise by 22.5%. Home to two of Scotland’s most well-heeled suburbs, Milngavie and Bearsden, they have some of the country’s best schools which are regularly ranked in Scotland’s top ten as well as being a sought after location for retirees.
With easy commuting distance from Glasgow, the research suggests that the once desired busy city life has been ditched for a more relaxed suburban lifestyle as parents are keen to escape the hustle and bustle of city centres to set up home in the outskirts.
City of Edinburgh
Home to five of the top ten most visited attractions in Scotland, City of Edinburgh has long been one of the most expensive places to live in Scotland. It is perhaps no surprise that that the city ranks within the Scottish top three, with prices expected to rise by a fifth (20%) by 2021.
The financial and tourism capital is also expected to experience one of the highest levels of short to medium term employment growth in Scotland over the 2017-2021 period (growth of 2.8%), and at the same time, the city is expected to see one of the highest population growth rates over the next five years at 4.5%, which will increase pressure on housing.
Edinburgh is also experiencing the highest rate of business start-ups per capita in Scotland (with nearly 88 businesses set up each year per 10,000 working age population).
One of Scotland’s most historic cities, Stirling, is also expected to see prices rise by almost a fifth (19%) across the next five years. Abundant in rich heritage with its own castle and Wallace Monument, the traditional market town in the farmlands has become one of the country’s most desired locations.
Stirling recently secured a City Deal, thought to be worth around £500m, which focuses on the creation of a digital district, city park and regeneration of the harbour and River Forth. The project is predicted to create 3,000 new jobs and increase tourism by 25% to turn the city into a digital technology, food and drink hub.
The economic and employment growth opportunities in Scotland are pushing up house prices in many areas of the country, with Stirling being one of them. East Renfrewshire, East Dunbartonshire and Stirling all enjoy populations with high earnings, ranging from 6% to 28% higher than the UK national average.
Scottish property investment
The research from Barclays also reveals that investors in Scotland own three properties on average, bringing the average total value of a property portfolio in Scotland to £818,093. Across all UK respondents, one in 10 (11%) own property/properties in Scotland and over a third (39%) are being used for rental income. Over a third (36%) of investors in Scotland are planning to buy new property/ properties in the next three to five years.
Calum Brewster, Managing Director, Barclays, Wealth & Investments, North Region, Barclays, said:
“It’s encouraging to see that property is still viewed as an important part of the investment portfolio in Scotland with high net worth investors typically owning three properties and over a quarter planning to buy property because they believe that it offers long-term investment security.
“There is also increasing confidence among property investors in Scotland, as many are taking a long-term view when it comes to putting money into property. It’s also interesting to see from our research how investment prospects are emerging outside of the established property heartland of London and the South of England into Scotland, with economic growth and employment opportunity fuelling growth in hotspots across the UK.
“We are here to support our clients at various stages of their investment journey and we can help by offering a range of innovative and personalised mortgage solutions to meet their individual needs, whether they are a seasoned investor or a millennial looking to increase their income.”