Good news for property investors with an eye on Scotland, as many areas seem to be resisting the market's downward trend. Despite the mortgage shortage and credit crunch generally felt throughout the United Kingdom, Scotland seems to be less affected. As official figures gleaned by propertywire.com show that while the national right of housing price inflation in the UK is 2.2%, Scotland's is approximately three times better at 6.3%.



Like the rest of the UK, property prices in Scotland have started to slow down. However, unlike the dramatic price drops in some parts of England, the experience is not expected to be the same in Scotland. On the contrary, despite the general trend of softening house prices, some areas continue to experience a growth in house price and market value. House prices in the big cities of Edinburgh and Glasgow is, as expected, on the uptrend. Oil-rich Aberdeen is expected to follow suit as well due to its strong local economy. Scotland has improved economically over these past few years, and this trend has revealed itself in the property and housing market. The current slow down in prices is seen as the market coming to terms with the past property boom and is now levelling out.

Property investment in Scotland definitely shows potential, and affordability is the main factor in the continued resilience on home prices. Mortgage affordability is also better in Scotland than in the other parts of the UK. The buy to let market is also promising. Rental demand is growing due to the declining availability of mortgage and the difficulty in obtaining credit. Because of this, many would-be first-time buyers have returned to the rental sector and deferred purchase for the meantime.

Unfortunately, existing Scottish homeowners are also facing problems protecting their homes from repossession. Studies show that one in five Scottish homeowners, totalling about one million people, are facing financial troubles keeping up with mortgage repayments. The future does not look bright for them, as creditors are expected to further tighten their belts and pull back on their credit limits. Furthermore, it has become increasingly difficult for homeowners to obtain credit as creditors, in an attempt to reduce risk to themselves, no longer hand out credit as easily as they once did.

The current trend among some Scottish homeowners is transferring balances from one credit card to another and remortgaging their property. On the other hand, lenders and credit card companies are responding by reducing credit limits and rejecting many new clients. Without a doubt, the number of repossessions and mortgage defaults continue to grow and many Scottish homeowners will lose their homes. While this is indeed very unfortunate, repossessions also mean a good number of properties up for auction at prices well below market value.

Buying below market value properties is an investor's best bet to get a bargain price on a property. Usually, properties auctioned off are those that are products of repossession, bankruptcy or because the owner has to pay off some outstanding debts. Since the owner, bank or financial institution wants to unload these properties right away, most of them are sold at below market value prices. With the current trend of high repossession rate and the overall resilient economy of the Scottish property market, buyers can most likely find good property investments in Scotland.

Copyright (c) 2008 Parmdeep Vadesha