The average rental yield returned to investors with property in Scotland has increased for the first time since March 2017, Your Move Scotland has found.
Fresh data from the letting agency reveals that the average rental property north of the border generated a return of 4.7% for its owners in March, higher than the 4.6% recorded a month earlier.
Consequently, landlord returns in Scotland are now at a six-month high. This is in contrast to England and Wales, where yields have held steady at an average of 4.3%.
The only two regions in England and Wales to offer returns higher than the Scottish average during March were the North East and the North West, at 5% and 4.8% respectfully.
Brian Moran, lettings director at Your Move Scotland, commented: “Investors in Scotland have seen stronger returns this month than in February.”
“This is the first rise in monthly yields since March 2017 and demonstrates why many investors from elsewhere are now looking towards Scotland to maximise returns.”
According to Your Move, across Scotland the average rent has increased 1.8% in the past 12 months to reach an average of £580 per calendar month (pcm).
The Highlands and Islands region posted the biggest increase, with a typical property now being let for £688pcm. This is 4.9% higher than a year ago, but lower than the double-digit increases seen last year.
The only area to have higher rents was the Edinburgh and Lothians region, where the typical tenant pays £699pcm. This follows a 4.6% year-on-year rise.
Elsewhere, there were also rises of 1.4% in the East of Scotland and of 0.9% in the Glasgow and Clyde region. The average rent in the East is now £541pcm while in Glasgow and the surrounding areas it is £589pcm.
The South of Scotland was the only region to see prices fall on an annual basis, dropping 1.9% to £537pcm.
On a national basis, the average Scottish rent increased by 1.8% in the year to March to hit £580pcm, which is 0.2% higher than in February.
The data from Your Move Scotland also shows that the proportion of households in arrears rose modestly in March.
Some 10.7% of all tenancies were behind with their payments this month, higher than the 10.5% recorded in February. Despite the rise, the level of arrears is still below the 11.2% found in December 2018.
On an absolute basis, the number of households in serious arrears - defined as two months or more - was 8,283 this month.
Moran added: “With more tenants now renting for longer thanks to the introduction of the PRT, landlords are benefitting from the increased security and stability provided by these tenancies.”
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