More Scottish Property News.

The combination of a slump in the housing market and the weak pound have seen an increasing number of overseas buyers snap up some of Scotland's most exclusive properties, according to Edinburgh estate agent Rettie & Co.

At the same time, Rettie, which is one of Scotland's premier upmarket property agents, expressed concern over the current grim state of the Scottish housing market, providing what is perhaps the most telling evidence yet that the downturn is impacting not just the lower and middle echelons of the market, but also those in the GBP1m-plus range.

vHowever, Simon Rettie, who runs the privately-owned firm, said: "If you're buying in euros or US dollars, the Scottish property market suddenly looks pretty appealing - and that's even before you take into account the reduced property values.

"We had one retired American couple recently, who decided it made more sense to buy a property in Edinburgh than to keep the money in a bank account, because the yield was better."

Rettie declined to put a precise figure on the number of upmarket properties sold to overseas buyers, except to say that most were buying in euros and US dollars.

In recent months, the pound has fallen to 23-year lows against the dollar and alltime lows against the euro.

vHe added: "I can't say the numbers are enormous - but certainly the number of overseas enquiries has gone from 5per cent last year to 10per cent this year. "There is also a lot of interest from expats and from people in the Far East, where markets tend to be more volatile.

"In saying that, I'm also thinking of a pretty holiday cottage on the West Coast of Scotland that just sold to people from Switzerland."

Meanwhile, in December a Danish family paid more than GBP5m for Dunira, a 5000 acre shooting estate in Perthshire.

The foreign interest in Scottish properties - even if the number of purchases remains small - will doubtless come as a welcome relief at Rettie in today's economic climate.

While the company posted a surge in its 2008 profits, it also warned of a "completely different trading environment" as the slump in the Scottish property market continues unabated.

vNonetheless, Rettie said he expected a "gradual return to market confidence" by the autumn, signalling that while the top end of the market has been the last to be hit it may also be the first to recover.

Rettie also noted a "significant reduction" in the number of GBP1m-plus homes sold in the current financial year and said the successes depicted in the company's latest accounts were a world away from the "realities of the past 10 months".

The company, which has offices in Edinburgh, Glasgow and Melrose, posted a pre-tax profit of GBP410,958 for the year to the end of April 2008 - around the time the Scottish housing slump began in earnest - compared with GBP271,125 in the previous 12 months. Turnover during the period climbed to GBP6.4m, compared with GBP6m last time.

The accounts also noted that private sales had increased to around GBP70m and that its rural properties and farms division held its own with GBP45m of sales during the year.

Asked about the current trading situation, Rettie said: "The new-build market has been severely hit, mostly because of the credit crunch.

"The lack of mortgage lending has had a definite impact on sales.

"I would say we were very fortunate to have our letting business, which has offset some of the downturn in transactions. While we are already starting to see some signs of hope, we have had to trim the business as others have."

Rettie added: "We had to make cuts where necessary and make ourselves a leaner and meaner machine."

Last autumn, the company cut 20per cent of its workforce to 58 employees.

Meanwhile, Rettie claimed that landlords were seeing rental prices increasing as people avoided buying properties - although, he said he expected rental prices to fall as the year progressed and supply begins to outstrip demand.

Official figures released last month by Registers of Scotland showed that there had been a GBP3.5bn year-onyear fall in the overall value of properties sold in the last quarter of 2008.