Property growth rate tipped to be flat in Scotland - commercial mortgages

04 February 2008

Commercial property in Scotland will be flat this year, it has been predicted, news which may interest those with commercial mortgages.

However, the author of the report making this prediction has told Scotland on Sunday there will be no repeat of the early 1990s commercial property crash.

A study by consultancy Drivers Jonas, published last month, forecast the market will grow by zero per cent this year in the country, as a consequence of the credit crunch and the recent market downturn.

Despite this, head of research Anthony Duggan told Scotland on Sunday, the fundamentals of the economy were much too sound to allow an early 1990s situation to develop.

Mr Duggan commented: "This is a very different market. Yes, demand is going to weaken but we expect rents to remain under control."

He added that people had not "run away" from real estate and that while the economy would be weaker this year it was not "fundamentally unstable".

Last month, Hargreaves Lansdown senior analyst Meera Patel commented that investors should remember that rises and falls in property values were "all part of the cycle" and advised that people should hold on to their investments rather than selling up.