Foreign investors plough £1.4bn into Scots property

With many property experts believing London is nearing a property bubble, property group JLL say Scottish real estate has received the highest amount of non-domestic investment in the UK outside the capital.

Cash coming into Scotland from overseas hit £1.33 billion last year, narrowly outstripping the south east of England, which attracted £1.32bn.

Added to this, a five-year wave of activity in home sales and a surge in house price growth is expected in Scotland and Edinburgh in particular.

Analysts at JLL predict that the cost of the average home in the Scotland will increase by 19.3 per cent by 2020 - with prices soaring by 26.2 per cent in the south east of England.

Industry experts are predicting the most dramatic rises will be in Edinburgh, Manchester and Leeds fuelled by university graduates and those relocating to new jobs.

Overall, £10.5 billion was invested in real estate outside London by international investors in the eight months to the end of August 2015, and Savills predicts that this will rise to £14 billion by the end of the year, the highest volume since it started collecting data in 2000.

The most popular sector for investment was retail and leisure, accounting for 57 per cent of investment, driven by several large transactions and the sale of some large hotel and retail portfolios.

Offices and industrial property were second and third, accounting for a 17 per cent and 16 per cent share of investment respectively.

Mat Oakley, head of commercial research at Savills, said: “Investors are attracted to Scotland by the quality of the assets and covenants, and the higher yields than those that are available in equivalent English cities.”