Properties in This University City Take Just Two Weeks to Sell

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(Bloomberg) — The end of the academic year has transformed pockets of Scotland’s biggest city into the UK’s hottest property market, heaping more pressure on the government to fix a national housing emergency. 

Take Glasgow’s West End. Centered around Byres Road, it’s a vibrant area of small cafés, lively bars and prized real estate. Lewis Gilmore at Clyde Property said it takes on average just 11 days to sell a home once it’s been advertised. The UK average is closer to 60. 

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The key, he says, is the proximity of Glasgow University. “The demand that’s created from Glasgow Uni is so significant that it goes into the first line description of adverts,” Gilmore said.

Founded in 1451, it’s one of the oldest educational establishments in the world with over 33,000 students from 140 countries, and a standout veterinary school. But inflated rental costs, combined with government-imposed rent controls and a decline in the number of affordable homes being built, have forced many students to go to the bank of mum and dad.

“Scotland is generally well behind on housing building targets, so it creates a perfect storm where parents are forced to buy,” according to Gilmore. 

It’s a recurrent theme up and down Britain. Student numbers started increasing toward the end of the last century, but accommodation failed to keep pace. And the outlook is deteriorating, as landlords cut the number of homes they’re buying to let to multi-year lows.

But the situation in Scotland is already dire. The devolved government in Edinburgh, run by the pro-independence Scottish National Party, declared a housing emergency in May, effectively asking the UK administration in Westminster to reverse cuts to its capital budget. 

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In Scotland, the issue of have and have-nots cuts deeply into national politics. After nearly 17 years as the country’s dominant force, the SNP was handed a significant drubbing in UK-wide elections last month. In the Scottish Parliamentary vote scheduled for 2026, its status as the party of government will come under severe threat. Housing will again be a major issue.

In Glasgow, the situation is especially tight. Research published in April by real estate company Savills showed there’s a ratio of 3.2 students for every bed — a nationwide high. 

For Owen Davies, a second-year arts student, renting wasn’t a realistic option, so he went to his parents. “It just took so long,” he said. “It’s all overpriced and there was pretty much nothing available.” 

According to figures this month from Rightmove, nine of the country’s 10 fastest-moving property markets are in Scotland — and four of them are in or around Glasgow. That rush to buy rather than rent translates into higher prices. 

The average house price in Glasgow rose 6.3% in the year to May 2024, the biggest increase in the UK, data from the Office for National Statistics show.

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Rent Controls

One factor is particular to Scotland: rent controls. Capped rents began in 2022. The more recent imposition of rigorous maintenance standards and longer notice periods for evictions led to a mass selloff of private rented portfolios. As a result, landlords often don’t want to let to students, according to Ruth Woodcock, an estate agent at D.J. Alexander.

“They want longer lets,” she said. “Hence students struggle to find houses, so they buy.”

That in turn has created a situation in which — because there’s been an accommodation crisis for years — new developments are more likely to be targeted at students at the expense of affordable housing for residences.

It all widens the wealth gap further in a city famed for its shipbuilding heritage, Victorian-era buildings and pockets of poverty. Even though it has one of the UK’s highest per-capita incomes, Glasgow has the country’s highest mortality rate, and the gap in life expectancy between its wealthier and poorer residents is growing.

In 2021, the then-coalition government promised to build 110,000 energy-efficient, affordable homes by 2032, a project requiring £18 billion ($23 billion) of spending. The administration is sticking to the target even after cutting the affordable housing budget by about 26% in February. The latest figures for the quarter to March show that starts were the lowest since 2014-15.

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“Affordable housing has completely collapsed,” said Paul Sweeney, a Labour member of the Scottish Parliament for Glasgow.

As property values climb, low- and even middle-income individuals are getting squeezed, notes Rashid Baig, a born and bred Glaswegian now the manager of the Q Club snooker and pool hall in the center of the city. He doesn’t hold out much hope that the political class will resolve the issue.

“A lot of promises get made,” he said. “They say a lot but do less. The prices of rentals are getting so high just for a room, it’s sometimes unaffordable for the middle class.”

—With assistance from Alastair Reed.

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