"We’re seeing significant activity amongst landlords who are looking to buy and renovate a property with a view to letting it."
We spoke to Holly Morrison, Paragon’s regional sales manager for Scotland, about the buy-to-let mortgage market north of the border.
FR: Does the Scottish market, where the LBTT ended in April, offer any clues as to how England may be affected by the tapering of the SDLT holiday after 31 June 2021?
Unlike in England and Wales where buyers can save up to around £15,000 in Stamp Duty, the break in Land and Buildings Transaction Tax offered property purchasers in Scotland savings of up to around £2,500. This meant it was less of an incentive and so doesn’t offer much comparable insight into how the markets south of the border will respond to the tapered end to SDLT holiday.
That said, if the Scottish market is anything to go by, England and Wales will continue to see lots of competition for good quality properties because supply is exceeded by demand.
FR: Are there any locations that stand out?
I cover such a vast area so see real variety in market conditions. I’d say that we see most applications for properties in Edinburgh and Glasgow. It was interesting to see that despite reports of flats falling out of favour due to Covid, in Edinburgh and Glasgow it is flats that have helped to drive the markets. Scotland has an abundance of beautiful outside space but there is still a buzz that draws some people to urban centres.
FR: Are there any lettings or property types that seem particularly popular at the moment?
I think Paragon’s return to short term finance was very welcome as this area seems to be underserved at the moment – especially in Scotland.
We’re seeing significant activity amongst landlords who are looking to buy and renovate a property with a view to letting it. This trend for ‘fixer-uppers’ is great because it means more good quality houses are coming onto the market and it provides an opportunity for investors to make a profit.
HMOs remain very popular despite the small slump we experienced earlier in the pandemic. With universities returning, we’re starting to see demand increase in the favoured areas and its likely to continue over the summer.
FR: We are hearing about a staycation boom – is this evident in Scotland and if so where?
Definitely. Holidaying closer to home is absolutely the go-to plan for the summer season ahead and I believe our North Coast 500 (NC500) route will be buzzing this summer. My husband and I took the trip in the May of 2019 and it was incredible. We actually camped and it only rained one night. The midges might put some people off though!
Landlords can benefit from increased revenue through short term letting and seem to be responding to the demand that is also set to continue over the summer. This is another market that Paragon has re-entered recently and I think it will be very busy.
FR: How do you see the market developing over the next six months?
I think there will be more confidence in the market as things return to ‘normal’.
As remote working becomes more permanent I think we’ll see a continuation of the shift in the tenant profile for city centre properties with some, often slightly older people or families choosing to move the quieter suburban and rural areas, replaced by those who are still drawn to the city lights.