While the general investment climate in Scotland is not universally regarded as unusually favourable, one asset class is attracting significant interest from institutions and high net worth individuals seeking an acceptable return on their money.
A combination of steady demand and constrained supply in the residential property market, against a backdrop of realistic adjustment to policy change, has led to exceptional rental yields — bringing in investors not just from the rest of the UK but internationally, according to property professional Robert Ross.
Robert, who runs Glasgow-based sales and letting agency Ronald Ross alongside director Kimberley Ronald, matches high-end investors with property opportunities and is achieving yields of up to 9% — and often significantly higher — against a sector average of 5% to 7%.
Another attraction is the caveat in the Additional Dwelling Supplement (ADS) which exempts buyers of more than six properties from the tax, making them immediately 8% better off than if the homes were bought individually, and attracting lower commercial LBTT rates.
Robert, whose firm’s portfolio is worth some £24 million, said: “Tenant demand remains firm and transaction activity is stable, creating opportunities for investors who are well-capitalised and properly advised.
“Professional buyers, both at home and abroad, are alert to the potential in Scotland for proven investments which are both fully-tenanted and fully compliant. Our focus is on compliance, which ensures efficiency and transparency, and the attraction for investors is undeniable — interest is evident from buyers in the Far East, the UAE and the US but, with lower house purchase prices in Scotland, the difference in yields is a big plus point for London-based investors, and there are far fewer pitfalls around leaseholds and service charges.”
Yield is expressed as the annual rental income divided by the property’s value, multiplied by 100. A £300,000 property in the south with a monthly rental of £1,500 would yield 6%; the same rental on a £180,000 Scottish property would yield 10%.
Robert is uniquely placed to act as a conduit between high net worth individuals and portfolio acquisition, leveraging a contact book built over two decades as a property broker. His family’s business traded for more than 50 years, growing from a small Glasgow shop into one of Scotland’s largest independent insurance agencies.
His current business, just two years old, is posting sales of £3.5 million and forecasting £4.7 million for the coming year. It is 70% letting agency — overseen by Kimberley Ronald and managing just under 300 properties — and 30% residential sales, with just over 100 completions so far this year.
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The firm is also helping distressed mortgage holders facing repossession by facilitating quick sales to investors, often saving banks repossession costs and protecting owners from sequestration. Robert works with banks, legal representatives, insolvency practitioners, and the courts to achieve successful outcomes for all parties.
With seven staff and space for thirteen more, the firm is actively seeking admin people and self-employed sales and lettings professionals.
He said: “We are building a strong reputation for helping both investors and homeowners to realise maximum value from their properties.”
