Scottish house prices are set for a 10% increase over the next five years with the regional centres of Edinburgh and Glasgow both in line for significant extra growth, JLL has predicted.
The property consultancy expects to see growth of 22% in Edinburgh and 17% in Glasgow well above the UK average.
Rents in the Scottish capital are also expected to increase by an average of 3.3% per year while those in the centre of Glasgow will rise by 3.2%.
The growth on both sides will be led by strong demand from buy-to-let investors, first-time buyers and a lack of new build stock coming onto the market.
But Jason Hogg, director of JLL’s residential team in Scotland, said the forecast for the whole of Scotland is somewhat skewed by the continued outperformance of both Edinburgh and Glasgow.
He said: “Edinburgh in particular is forecast to see strong price growth as limited development activity creates further discord between demand and supply.
“There have been a few core city centre schemes in recent years but the high price points of these have not alleviated the undersupply of more ‘affordable’ private housing in Edinburgh’s city centre.
“But Glasgow too is set for an exciting few years and something of a revolution in housing terms. The build-to-rent sector seems to have dialled in to Glasgow over the past year and is lining up to dominate residential development activity over the next few years.
“Not only are there thousands of units in the planning pipeline, but with UK wide build-to-rent operators behind this drive, the build-to-rent transformation has greater weight, credence and certainty.”