Scotland sees rents rise 5.4%
Edinburgh and the Lothians have the highest residential rents in Scotland with overall values up 5.4% in the last 12 months, according to the latest Your Move figures.
This means that the average property in Scotland lets for £576 per month and the Your Move buy-to-let index also shows that rental yields continue to rise and are now at 5.9%, higher than in England and Wales.
The index report points out that there was no sign of a summer lull in Scotland and rental prices held firm between July and August and recent economic turbulence has had little short term effect on the Scottish rental market.
Also, demand and prices have remained strong since the UK’s decision to leave the European Union, even though voters in Scotland preferred to remain.
The top performance came in the South of Scotland where average rents have grown from £511 to £590 since August 2015. Elsewhere the East of Scotland, Edinburgh and the Lothians and Highlands and Islands regions all posted rent increases of above 4% in the last 12 months.
Glasgow and Clyde was the only area of the country to post a fall in rents in the last year. Properties in this region now attract a typical rent of £536, some 3.2% lower than a year ago.
However, on a monthly basis, Highlands and Islands saw the biggest leap in prices. Rental properties in this area grew by 4.6% between July and August to reach an average of £598.
Edinburgh and the Lothians region remains home to the highest average rents in Scotland. Properties in the capital city and surrounding towns are now typically let for £643 per calendar month, some 0.6% higher than the previous month. It is the only region of Scotland to boast rents of more than £600 a month.
The average gross rental yield for properties in Scotland stood at 5.9% in August 2016. This figure continues to be much higher than levels seen in previous years and is above July’s figure of 5.8%.
The report suggest that rising house prices and increased demand from tenants have prompted the increase in yields. By comparison, a year ago the average yield was 4.1% while in August 2014 this figure was 4%.
Yields in Scotland also continue to outstrip the returns seen in England and Wales. The average Scottish yield of 5.9% is above the England and Wales average of 4.7% in August. • Even the English region with the highest yields was not able to match this Scottish figure. Properties in the North East of England generated a return of 5.6% in August, still below the figure found across Scotland.
Across all areas of Scotland 12.1% of tenancies had arrears of a day or more in August 2016 but this figure has fallen month on month, down from the 12.5% recorded during July. It is also lower than the same point a year ago when 12.2% of Scottish tenancies were in arrears.
However, Scotland’s arrears rate for August is above the level found in England and Wales. Across these two nations the average rate of arrears was 9.8% during the month. On an absolute basis, the number of Scottish households in serious arrears, defined as two months or more, was 11,541 in July 2016.
Brian Moran, lettings director, Your Move Scotland, said: “The Scottish rental market continues to power on. Despite the vote to leave the European Union having an effect on the wider economy, the rental market in Scotland remains in great shape.
“Average rents have risen month-on-month, even though the summer season traditionally signals a slowdown in the market. Landlords are also seeing increased gross rental yields across Scotland. The nation remains a popular place for investors to purchase rental properties.”