Buying property in Glasgow? A brief guide for property investors
Glasgow is one of the most popular cities in the UK for property investment, and it’s easy to see why. Glasgow offers property investors great returns, with high rental yields and strong demand for rental properties.
The city has a thriving economy and is home to many major businesses, making it an attractive place to live and work.
In the past 5 years, Glasgow has seen average house price growth of 4.5%, making it an excellent city for investment. Rental prices have also grown steadily, with the average rent for a one-bedroom flat in Glasgow now standing at £843 per month.
There is a strong demand for rental properties in Glasgow, with 38% of residents renting their homes in the private or social sectors. This is due to several factors, including the city’s large student population and the high cost of buying a property in Glasgow.
Some areas in Glasgow are popular with property investors, such as the West End, Merchant City and East End. These areas offer high rental yields and are in high demand from tenants.
Table of Contents
- What are the requirements to buy a property in Glasgow?
- How much tax do I pay when buying a property in Glasgow?
- How to find a property in Glasgow?
- Where to buy property in Glasgow?
- What are the pitfalls of buying property in Glasgow?
- Why buy property in Glasgow?
- Is it worth buying a property in Glasgow?
- Can foreigners buy property in Glasgow?
- Is now a good time to buy property in Glasgow?
- Invest in Glasgow with GuestReady
1. What are the requirements to buy property in Glasgow?
There are few restrictions on who can buy property in Glasgow, making it a great city for investment. However, property purchases in Scotland work a little differently from the rest of the UK.
Solicitor Negotiations
In Scotland, properties are bought and sold through a system called ‘Solicitor Negotiations’. This means you will need to instruct a solicitor to act on your behalf in the purchase process.
Home survey
The seller must provide a home survey, an energy performance certificate and a property questionnaire as part of the marketing process.
Mortgage agreement
The buyer must have an agreement in principle for a mortgage arranged before making an offer on a property unless buying in cash.
While some of the steps that the solicitors take are different from the rest of the UK, the process is broadly the same for the buyer themselves. You will need to provide the following:
- Proof of ID – passport or driving licence
- Proof of Address – utility bill, bank statement or council tax bill
- Evidence of funding source – Payslips or bank statements
Your solicitor requires these documents as part of the due diligence they must carry out on your behalf.
2. How much tax do I pay when buying a property in Glasgow?
Stamp duty in Scotland has been renamed the Land and Buildings Transaction Tax (LBTT). The LBTT is a tax payable on the purchase of property, and the amount payable depends on the property’s value.
The LBTT rates for residential properties in Scotland are:
- 0% on properties worth up to £145,000
- 2% on the amount between £145,001 and £250,000
- 5% on the amount between £250,001 and £325,000
- 10% on the amount between £325,001and £750,000
- 12% on the amount of the property value above £750,000
Please note that these rates are applicable for first homes only. For additional dwellings, an extra +4% applies to each band.
After the purchase, you will receive a bill for council tax (a yearly property tax) and water rates, which are bundled together. The amount demanded will depend on the properties band (an assessment of the property’s value).
For complete information on the amount of council tax and water charges for a Glasgow Property, check here.
UK properties’ earnings are subject to income tax. As a non-UK resident, you are only taxed on the money you earn in the UK, so you don’t need to worry about suddenly becoming liable for tax on your home country’s income.
3. How to find a property in Glasgow?
There are many online property portals in the UK. These include Rightmove and Zoopla, offering the widest selection of Scottish properties online. If you prefer a local real estate agent, the most active agents in Glasgow are Town & Country Glasgow, Clyde Property, and AB Property Consultants & Estate Agents.
4. Where to buy property in Glasgow?
The city, as a whole, has a lot to offer residents. There are many different areas of Glasgow, each with its own unique charm. The Merchant City is the historic centre of Glasgow and is known for its lively nightlife and abundance of culture. If you’re looking for somewhere a little more relaxed, the West End might be more your style.
It is important to be aware that Glasgow is one of the first cities in Scotland to implement restrictions on short-term leases, specifically on Airbnb. A licence will be required to operate an Airbnb rental within the city. Those who operate without a licence will risk a £50,000 fine and a ban.
The regulations restrict short-term rental in flats located close to communal entrances or facilities, where the regularly changing occupants can cause issues for neighbours. The rules will also apply to mixed-use developments, such as office blocks with residential flats.
Additionally, there are many areas where the local authorities will almost certainly refuse a licence due to an already high number of non-residential uses and issues with parking and congestion.
However, the good news is that there are areas where the rules are more relaxed, and there are ways to work within the restrictions in the more restricted areas.
Merchant City
The Merchant City is the historic centre of Glasgow and is known for its lively nightlife and abundance of culture. The Merchant City is popular with young professionals and students due to its close proximity to Glasgow’s universities.
The Merchant City offers many local amenities, including pubs, restaurants, and cafes. It’s also home to some of Glasgow’s most iconic architecture, including The Lighthouse and The Tron Theatre.
Merchant City is an area that continues to allow some Airbnb and short-term leases, subject to acquiring a licence. Licences will generally be granted along active travel routes and areas with high accessibility. The area provides a typical yield of 6.9% for long-term rentals.
Townhead
Located just north of the Merchant City. Townhead is a primarily residential area with a mix of Georgian townhouses, Victorian tenements, and more modern developments.
Townhead is close to Glasgow Cathedral and the Glasgow Royal Infirmary. It’s also within walking distance of the University of Glasgow and Glasgow Caledonian University.
Townhead is an area that has been affected by the new Airbnb and short-term letting regulations. While it’s still possible to operate a short-term let with a licence, the number of licences that the council will grant is limited.
If you wish to offer an Airbnb or other short-term rental in this area, give careful consideration to the property’s location. To obtain a licence, ensure the property is not close to communal entrances or facilities.
The average yield for long-term rentals in Townhead is 7.8%.
Dennistoun
Dennistoun is located to the east of Townhead and is another popular residential area. It’s known for its Victorian architecture and tree-lined streets.
Dennistoun is home to a number of independent shops, cafes, and restaurants. It’s also well-connected, with frequent bus and train services into the city centre.
Dennistoun has been strongly affected by the new Airbnb and short-term letting regulations. It is a near certainty that any application for a licence on a previously unlicensed location will be denied. Therefore, our advice would be to look out for currently licenced properties that enter the market and snape them up, as Dennistoun offers one of the highest yields in the city, which may be worth the higher purchase prices.
Dennistoun has a very healthy average yield of 9%.
Partick
Partick is located west of the city centre on the north bank of the River Clyde. It’s a popular area for students due to its proximity to the highly celebrated University of Glasgow. Partick is also well-connected, with frequent bus and train services into the city centre. It’s home to a number of independent shops, pubs, and restaurants.
While Partick has not been as strongly affected by the new Airbnb and short-term letting regulations as other areas, it is already a vibrant and busy area, so expect some licencing challenges. Look for properties located along major transport routes, as these will be generally allowed if it is clear there will be no effects on the character of the area.
For long-term leases, expect a slightly lower yield of 5.8%.
Govan
Govan is a district in the southwest of Glasgow, on the south bank of the River Clyde. It’s an area with a long industrial heritage and was once home to shipyards and engineering works. These days, it’s a popular residential area for young professionals and families.
The new Airbnb and short-term letting regulations will significantly impact Govan. There are already many Airbnb-style rental properties in the area, and while many will manage to obtain licenses, some are bound to be disappointed.
To increase your chances of obtaining a licence to operate a short-term rental, give consideration to the location of the properties. Avoid properties in cul-de-sacs and other small communal areas, and instead, look for properties that are either along major transport routes or set deeper in areas of communal properties, like the upper floors of blocks of flats.
Owners of properties in Govan can enjoy a yield of around 8.8%.
Hillhead
Hillhead is located west of the city centre, just north of Partick. It’s a popular area for students due to its proximity to the University of Glasgow and the Glasgow School of Art. It’s known for its Victorian architecture and tree-lined streets. Hillhead is also home to a number of independent shops, cafes, and restaurants, as well as being well-connected, with frequent bus and train services into the city centre.
Hillhead will be impacted by the new Airbnb and short-term letting regulations but not to the same extent as other areas. It’s still relatively easy to operate a short-term let with a licence in Hillhead, but the average yield for long-term is a little weaker than some other areas, at 6.7%.
5. What are the pitfalls of buying property in Glasgow?
As we’ve covered above, if you are planning to invest in a property with the intent to let it via Airbnb or other short-term leases, you need to be aware of the new regulations that were put in place earlier this year. By 2024 all short-term lease owners must be licenced or risk a £50,000 fine and a ban from renting out property in the city.
Short-term licence
While it’s still possible to operate a short-term let with a licence, the number of licences that will be granted is limited. Look for properties on major transport route (i.e., noisier, less appealing locations with an already high number of people in transit) and avoid properties that sit at communal entrances, to ensure your short-term lets do not impact the existing population of the building.
UK’s economy
Glasgow is not immune to wider economic forces. A downturn in the UK economy could lead to a decrease in demand for rental properties and a consequent decrease in rental prices. With recent political problems, the UK economy is far from stable, so this is something to bear in mind when considering investing in property in Glasgow.
Property value
Finally, as with any investment, there’s always the risk that the property you purchase will not increase in value as much as you hope. While Glasgow has seen strong growth in house prices in recent years, there are no guarantees.
6. Why buy property in Glasgow?
Despite the risks we’ve outlined above, the city has seen consistent growth in property value growth, which has yet to suffer from any significant downturn. An imbalance in the supply and demand of properties, particularly in the rental market, has helped push prices up, and with a young population and strong economy, there is every reason to believe that this trend will continue.
Glasgow also offers investors a great deal of choice. From city centre apartments to family homes in the suburbs, there’s something to suit every taste and budget.
7. Can foreigners buy property in Glasgow?
Yes, foreigners can buy property in Glasgow. There are no restrictions on who can purchase property in the city. However, you should be aware of the potential extra costs involved, such as stamp duty. As your investment is likely not to be your first property, you will pay an additional 4% on top of the standard stamp duty rates.
8. Is now a good time to buy property in Glasgow?
Glasgow property values are rising faster than the Scottish average, suggesting that now is an excellent time to buy in the city. The recent introduction of the new short-term letting regulations has been interpreted by some as a sign that the city is cracking down on investment properties.
If you plan to develop some short-term rentals in the city, seek advice from GuestReady, or a local agent, before proceeding. We can guide you to the best areas to ensure your applications are successful.
9. Invest with GuestReady in Glasgow
GuestReady provides professional management services in Glasgow. We can help you maximise your rental income, ensure your property is compliant with all relevant regulations, and take care of all the day-to-day hassles of being a landlord.
We ensure your listings are up to date, with professional photography, compliant documents, and a dedicated manager to answer any questions your guests might have.
