An Introduction to Buying in Scotland
An Introduction to Buying in Scotland
Understanding a new market is not impossible. The best place to start is to visit a local lettings agent to get a feel for the land, and the market. Walk the streets and visit a variety of properties to get an understanding of the quality of the stock available and the local amenities. Connectivity is one of the core influencers for professional tenants for example, so knowing what the city has to offer will help you recognise they types of tenants you’ll be able to attract.
Scotland is the UK’s most attractive location for property investment after London, with the UK’s fastest growing rate for FDI (Foreign Direct Investment). The opportunities are increasing, along with demand for housing that rivals what London has to offer.
Home to a number of vibrant cities, world class universities and infrastructure, the calibre of talent in the workforce is increasing year on year. With the exception of Aberdeen, all major urban markets have continued to thrive in Scotland in recent years.
As one of the UK’s leading financial centres, Scotland is also ranked as the best performing destination for inward investment outside of London since 2012. Outside of property investment, Scotland has also been ranked as the UK’s top location for foreign investment with over 5,100 companies set up there.
How does it differ to the rest of the UK?
Buying a property in Scotland is often a quicker, and dare we say a less painful process, than in the UK. The reason for this, is that the sales are less likely to fall through, compared to the UK.
Generally speaking it can take between four and eight weeks for a purchase to go through in Scotland, compared to the eight to twelve weeks it takes in the UK. There are a few reasons for this, which we’ll explore below in more detail.
These differences are also worth noting if this is your first time investing in Scotland. While there are many processes that will remain the same and might perhaps feel like common sense, it’s important not to get caught out – and in Scotland’s case, double up the work.
The seller of any property in Scotland must provide potential buyers with a Home Report. The only exceptions to this are buildings that have recently been renovated into residential properties or are newly built. The Home Report allows for buyers to be better informed, with a clearer view of a property’s condition and value. These don’t exist in England, which explains the contrast in time it takes to complete the purchase of a property. Understanding the value of your investment cuts out much of the need for a middle man and the risk of any potential delays, or people backing out all together.
The Home Report consists of three core components:
A single survey – This includes an assessment of the property’s condition (roof, external walls and plumbing) and a valuation. Consider getting an additional survey done for a more extensive view of the condition of the property, particularly if it’s older.
An energy report – This will list the energy efficiency rating and the carbon dioxide emissions, thus identifying the environmental impact of the property.
A property questionnaire – The seller will complete a questionnaire to outline the history of a building (any recent repairs or historical ached) as well as the finer details of the property (parking, council tax band).
Making an offer
What’s great about the property buying process in Scotland is that there is a much lower risk of Gazumping. Once a price has been agreed properties are usually taken off the market, so the risk of being outbid and a deal falling through are considerably lower than the likes of London for example.
In Scotland, the marketing and sale of a property is usually managed by solicitors – in contrast to the common use of estate agents used in England. Pricing is listed in one of three ways – ‘offers around’, ‘offers over’ or a fixed price. When a property isn’t listed for a fixed price, a fixed closing date will be applied in order to monitor and manage the bidding process.
Your solicitor will work on your behalf to ensure that your offer is passed onto the seller (through their solicitor), with details of the offer and when it will be paid.
These differences enhance the investment process in Scotland, making the country attractive for further foreign and internal investment. Understanding where to begin in the process will make all the difference to the pace of output and the level of work required. There are two conversations we would advise you have at the outset – one with a local lettings agent to discuss the market offering and one with a solicitor to get the ball rolling with your purchase.