Deal of the week - 2 bed flat in Broomhill, over 7% yield

As the nights continue to get darker and Christmas is almost upon us, it is a quieter time in the property market. But good deals are still around. Like this one that has just come on the market with Paccitti Jones for offers over £89,000.

For full details click here

It is a 2 bedroom flat in the popular Broomhill area in the West End. It is an area I like a lot, with good amenities and parks, is close to the University and town centre and is popular with both young professionals and families. It is a strong rental area - around 1/3rd of households are in private rented accomodation - so renting out should not be a problem.

The flat looks like it could benefit from a some modernisation / re-decoration and probably a new kitchen and bathroom. This should cost you around £15,000 and makes it more attractive to the investor market.

This flat, when done up, should rent out quickly. According to the latest Citylets stats, rents in the area are up 4% year on year and the average flat only takes 14 days to rent. In terms of rental return you should expect between £700 and £750 a month.

So looking at the figures, if the property costs you £115,000 (purchase price of say £100,000 and £15,000 spent on updating) and you rent it out at £725 pcm you will achieve a good yield of 7.6%.

And if you act now you can avoid the new 3% stamp duty levy for buy-to-let investors that comes into force in April, saying yourself £3,000.


The key to property investing is buying the right property in the right location. If you would like to have a chat regarding this, or any other property, then why not give me a call on 0141 221 1827 or drop me an email on derek.livingstone@douglasdickson.co.uk. At Douglas Dickson we are always happy to give you our unbiased opinion. Likewise, if you want to take the hassle from finding the deals yourself, we offer a property sourcing service – click here to find out more.

What does the additional stamp duty charge on buy-to-let mean for Glasgow property investors

John Swinney announced his spending plans and draft budget for 2016-17 for Scotland yesterday. As I expected, he has followed George Osborne's Autumn Statement last month and slapped a 3% stamp duty surcharge on buyers of buy-to-let properties and 2nd homes in Scotland. (See my earlier post on why I don't think Glasgow buy-to-let investors should be too concerned by this).

The table below, taken from the Budget summarises the proposed changes to the Land and Business Transaction Tax* ("LBTT") for additional home purchases. The changes come into effect from April 2016 and affects all purchases over £40,000.

So what does this mean in practice. I have pulled together the table below to show the amount of LBTT that would be due today under the current system and what it will be post April 2016 so you can see the difference. For a property at £125,000 (the average in Glasgow) the change will result in an additional cost of £3,750. Not nice, but I don't think end of the world.



For properties under £40,000 there is no change and no LBTT to pay. For properties between £40,000 and £145,000 the stamp duty will be 3% vs nothing at the current rates and at £250,000 the effective rate is 3.8%.

The stated reason the Scottish Goverment is bringing in this levy is to encourage first time buyers at the lower end of the market which they believe are being crowded out of the market by buy-to-let investors. I don't believe this measure will actually make a big difference for first time buyes. One of the main reasons first time buyers are struggling to get on the property ladder is the high property prices relative to stagnant salaries and the difficulty in getting mortgage due to tighter lending restrictions. High prices are caused by inability in Britain to build enough new housing to meet the growing demand, which this tax does not address. Indeed a report today compiled by the Centre for Economics and Business Research (CEBR) predicts that prices of homes across the country are predicted to jump by 50% in the next 10 years as a shortage in housing supply continues to push up prices.

The Scottish Government expects this tax to raise between £17 million and £29 million in 2016-17.



To discuss anything you have seen in this blog or simply to arrange a convenient time to meet for a chat about the Glasgow property market, please call me on 0141 221 1827 or drop me an email on derek.livingstone@douglasdickson.co.uk.

And if you are considering investing in a residential or commercial property in Glasgow, at Douglas Dickson we are always happy to give you our unbiased opinion. Likewise, if you want to take the hassle from finding the deals yourself, we offer a property sourcing service – click here to find out more.


*Note the Land and Business Transaction Tax ("LBTT") replaced Stamp Duty Land Tax ("SDLT") in Scotland in April 2015.