Aberdeen a UK property hot spot

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DESPITE talk of a slowdown in house prices, Scotland continues to be a property hotspot, with Aberdeen, Glasgow and Edinburgh faring particularly well.

Property specialist Knight Frank investigated the changes in the housing market to assess the areas it felt were a safe bet for those looking to invest in property.

Factors taken into account included affordability, employment prospects, earnings, population growth and education standards. They also absorbed Channel 4’s most recent annual assessment of the best places to live in the UK, which is a regular feature of the highly popular Location, Location, Location programme.

Information combined from the above sources, supplemented by basic statistical data from agencies including the Land Registry, helped formulate a list of the top 10 investment prospects.

Scotland rated highly, with Aberdeen, Glasgow and Edinburgh said to be the strongest cities for investment, but there are pockets between these cities where it remains equally viable to buy with the expectation of capital growth. Average prices are currently below £150,000, which is an impressive £30,000 below the average UK price. The latest quarterly survey of UK house prices showed annual UK house-price inflation at a marginal 2.2%, while Scotland, on average, is roaring ahead at 6.3%, almost three times the UK rate.

There is an intriguing anomaly that is now working in Scotland’s favour, and that is that average property values are still some 84% behind those in England and Wales.

This means Scotland’s house prices are not only rising faster than anywhere else, they are also more affordable than anywhere else except some regions in the north of England.

The mortgage crunch has also placed Scotland in a slightly better position for buy-to-let investors, because it actually has fewer buy-to-letters, resulting in lower competition and a better mix of residential owner-occupied communities.

In short, the market has not been so grossly overvalued as it has in some other regions in England and Wales.

The net result is a more stable, more realistic and more affordable market, and property values that are holding their own despite the troubled climate.

More importantly, because Scotland’s values are expected to continue along an upward path, they are resilient to any downward pressure for the time being, making the whole area well worth considering for those looking to invest in property.