According to the latest buy to let index from Your Move, Scottish rents are increasing faster than those in England and Wales, The average rent in Scotland has increased by 2.2% in the last twelve months, compared to 1.5% in England and Wales.
Record Highs in Edinburgh
The average rent in Edinburgh is £615 per month, which is a record high, but Glasgow has fared less well – rental prices there have dropped slightly. Unfortunately the increase in rental prices has affected affordability and rent arrears are on the up. 6.5% of Scottish tenants are now in arrears, compared to 6% twelve months ago.
“Scotland may be outperforming the rest of the UK with higher employment rates and rising wages, but when the rate of inflation is taken into account, in real terms earnings aren’t helping people climb out of the red,” explains Christine Campbell from Your Move.
Rental yields in Scotland in October were 4.1%. This is a slight drop on the same period last year – in October 2013 rental yields were 4.2%. The annual return on rental property was 8.9% over the last twelve months, but this dropped off slightly before the Scottish independence referendum.
The Scottish Independence Effect
“The question of Scottish independence loomed large over the housing market this summer, and property price growth faltered as would-be buyers and investors hesitated to see how the votes rolled in. While this has left a tiny imprint on landlord returns in the past couple of months, this impact was cushioned by stable and resilient rental income – and the outlook certainly hasn’t dulled for buy-to-let,” says Christine Campbell.
