Rural Homes being Bought up by Overseas Buyer

[Ruralhomescrisis]

I’ve name changed for this, as this relates to a very small rural community.

Like many small rural communities in a beautiful part of Scotland, holiday homes have pushed up prices of homes and land. My family are from a small village and have lived here for generations. I have siblings so not likely to inherit a house and have been looking to buy a property and move back for 3 years. Everytime a house goes on the market, we get outbid by someone wanting a second home / holiday home. Very annoying, but not unexpected.

What is unexpected is that the last few have all been bought by the same people who live in a far flung part of the world. This not only feels hugely unfair, but slightly suspicious. Why would someone want multiple properties in a very rural setting? Future development? These are crofts so large scale development seems unlikely.

The country in question has a reputation for financial ‘laxness’ - could this be a money laundering issue? If so, what can be done about this?

I feel like reaching out to these people (I have their contact details) to explain the impact on the community - many young families would love to settle here but at this rate our tiny school is heading for closure. Is this a terrible idea?

i don’t know what I want to gain by this post but if anyone has any insights or advice, I’d love to hear. I feel so helpless, and the decline in permanent population and community spirit is devastating

The people to reach out to are the sellers not the buyers.

There is absolutely no reason whatsoever that the seller can't sell to a local person at a price they can afford. The seller decides the price, not the buyer.

Whats the country that they're from?

I’d contact your MP too. The sooner we ban overseas buyers from buying UK property they have no interest in living in the better.

This is the reason the UK property market is seen as the money laundering capital of the world.
Dirty cash has inflated London, the SE and is now spreading across the whole Isles.

Speak to the sellers. Maybe they are unaware that their buyer is the same buyer as the other houses'.

I have heard that Scotland ( a bit like New Zealand) will be a bit of a haven from climate change, something to do with geography and Abundent fresh water. Unsure if that’s true but local to me Americans hsve pretty much bought a village, castle and estate and are basically doing posh time share to high net worth individuals £100 million plus. Houses all went for 70-80k over the home report which is impossible to compete with. I think as a seller you’d be hard pushed to turn that down.

I have heard that Scotland ( a bit like New Zealand) will be a bit of a haven from climate change, something to do with geography and Abundent fresh water. Unsure if that’s true but local to me Americans hsve pretty much bought a village, castle and estate and are basically doing posh time share to high net worth individuals £100 million plus. Houses all went for 70-80k over the home report which is impossible to compete with. I think as a seller you’d be hard pushed to turn that down.

I don’t want to be too specific about the country, but it is an African country. The buyers split their time between Scotland and this other country and have businesses in both.
I have spoken to one or two of the sellers but unfortunately they are often people who are absent owners (family inheriting crofts and splitting the proceeds) and just looking for a profitable sale. One said to me that for all they knew they could sell to me at a lower price, and I could sell straight on and make a profit! It’s a fair point but doesn’t help anyone.

@Tiredofwhataboutery
i thought Americans didn’t believe in climate change! (Joking)

That does kind of make sense, and I can see the similarities with New Zealand.
But if rural Scotland becomes enclaves of wealthy holiday homes, who is there to ‘service’ these holiday homes. Won’t they need cleaners, maintenance staff, hospitality staff, drivers, dog walkers? Where do they all live?

In the meantime, life in a rural setting becomes unsustainable for those who want to stay - schools close, bus services cease, community groups dwindle - to the extent that existing families can’t function anymore and also sell up. And unaffordable to those whose jobs keep the communities going.

I’ve been talking about this happening at some point for 20+ years, it’s a logical thing for people with lots of money to do with the climate heating up but it’s so potentially damaging. We need restrictions on overseas buyers as I believe some other countries do - Norway? However we’d still have to deal with people from the South East cashing in their inflated property assets and moving up.
I live somewhere where the local estate was bought by absentee owners from Saudi a long time ago, they only visit for a couple of weeks a year and many building they don’t use are neglected to the point they are almost derelict.
Andy Wightman writes well on the subject.

foreigners can buy property in Norway. Swiss law of lex
roller might be better,
limiting the amount a foreigner can buy.
people who have more than one home are idiots. Universal double/triple council tax for second home owners is a way to go.

I do not think it is reasonable to stop people from selling property to whomever they’d like for the highest price; where does that end? Gives me communist/dictator vibes. Unfortunately we do not have a right to live next to family or in the area we grew up in. A lot of people have to move to get employment especially rurally.

so many MSP/MP have second and third homes here and abroad. Good luck with banning them. I think the way to go is to make it so much more expensive.

crofting Commission is quite powerful group whose original purpose way back in the 19th century was to be rolled out across the whole of Scotland but who knows what happened.

i heard Andy wightman speak at a common weal event a few years ago before he was a MSP: there has to be middle ground for him, perhaps he has mellowed.

do people really think Scotland will escape significant global climate change effects? Anecdotally I have experienced, I live rurally and I work in agriculture, a much more drier, windier and extreme storms. There is talk about the Gulf Stream collapsing which would really affect our climate.

I’ve not heard of Andy Wightman, thank you I’ll look him up.

Double council tax and holiday let licensing are both in effect here, but have had little impact. A holiday home owner can make £3000 a month from a holiday let, but maybe £900 a month for a tenanted let. Even after double council tax and all other costs this is still a good profit.

I’ll try my MP/MSP too but suspect I’ll be told that the introduction of ADS was a huge success (but is now just seen as a cost of purchasing a property to those effected.)

Could an extension of ADS work, an LBTT supplement payable on properties being bought by overseas residents/offshore based companies?

I appreciate no-one has the right to live where they grew up, but the rural Scottish communities and ways of life are unique and worth investing in surely?

You could get advice from the Crofting Commission and/or the Scottish Crofting Federation.

Write to Andy Wightman, look up his website, Who Owns Scotland.

What are the people doing with the houses - are they lying empty? Are they looking to decoft the land?

Write to your local community council, local authority councillors and your MSP.

I hate second home ownership but people are selling to them to maximise their profit at the expense of the community which is also sad.

There are some communities in the lakes and Peak District where sales I think are restricted to people already in the area/ working in the area - could that work ?

I do agree with you op.

There is another option though; more housing.

lobby/write to MSP/MP for more homes to be built in your rural area.

Get along to your local community council and get your voice heard about your housing concerns and any housing developments in your area. There is a lot of weight behind community council comments and they are there to represent residents views not just the select few who are most vocal.

Also comment personally on any developments on line on the need for housing for local residents first Tell your local councillors.

Nail on the head. In the OP's case, it definitely sounds like money laundering. There are entire floors of apartment blocks lying empty because they've been bought by foreigners who seemingly have no intention of ever living in them. They're probably going to get sold/given to other drug barons in exchange for drug shipments (or arms), as also happens with luxury yachts, stupidly highly priced paintings, etc. They can't easily transfer hard cash between drugs gangs, but they can buy/sell assets at over/under market valuation to transfer assets in return for illegal goods. There've been governmental clampdowns and additional taxes on expensive apartments and homes, so if that avenue is now closed, next best thing is to buy lots of smaller value properties instead.

Same happened in Cyprus with Chinese and Russian criminal gangs who bought loads of apartments in now luxury complexes and leave them entirely empty and unused. I first went to one particularly complex 20 years ago when it was newly opened. Been back many times since and the last time, last year, over half the apartments were clearly untouched and in the same condition as 20 years ago, i.e. dust on windows, some whitewashed windows, clearly empty, etc.

There's a reason why "some" paintings and other works of art sell in the "open" market at ridiculously high prices - it's drug gangs transferring "money" from one gang to another - a bigger version of the High Street Turkish Barbers - money laundering in plain sight!

They actually bought another holiday park ten miles up the road that is being used primarily to house staff. All the houses in the village are being used for staff. I think they built posh lodges for the actual guests, they’ve built a lot of fences to keep the plebs out. They have reopened the (free) public toilets though and are cleaning/ maintaining them which has bought lots of public goodwill.

Now is the time because at the moment, all councils are asking community councils for residents’ views to shape and form the local development plan. Get your voice heard that more housing is needed. Anyone can attend any community councils btw. Your views are just as important as any one else’s.

This is a quite interesting article about the way Scottish land is being sold. www.theatlantic.com/science/archive/2022/05/scotland-climate-change-land-use/629835/

Money laundering aspect is very worrying.
Wasn’t there something about Ukrainian companies and Scotland being easy target to start up dodgy movements of money, I think the loop holes have been closed.

housing in Scotland is shocking especially in rural areas; lots of folk wanting to keep rural Scotland in a holiday park stagnation, I have often heard it referred to as a modern day highland clearances.
I remember watching a tv programme where a Scottish landlord said the highland clearances were necessary as population were decimating the land. There had to be balance.

I wouldn’t necessarily say it’s money laundering. It’s capital appreciation for many people.

I’m a community councillor in a rural area. We’d love more people to get involved with the Community Council, is like getting blood out of a stone! About the only thing that does get people concerned is the threat of house building, locals are not keen at all. We are down for 350+ new houses but the developers have been extremely evasive. We are of course very keen to have step- down housing, affordable housing, starter homes etc. but the reality it’s we are most likely to get £500k+ executive homes and we have had endless problems with consultation and communication ( lack of ).

Do you have access to land where you can self-build the SG offer self build loans for rural areas, although this might be the last year.

Yes @Wbeezer im a community councillor in a rural area too. Housing proposals are thin on the ground here but plenty of solar farm developments which really annoys our local residents.

We’re rural but a “posh” village that’s within commuting distance of lots of places so we are under pressure from developers.

I'm on a Scottish island and 2 of the houses in close proximity to me have never had a single person near them in 3 years! The others are holiday homes that sit empty for months of the year. Not sure what the answer is, money talks.