MARCH 27, 2018 | BY A & S Property
Scottish rental market continues to slow
Private rental prices paid by tenants in Scotland rose by 0.7% in the 12 months to February 2018, reaching an average of £569 per calendar month (pcm) seasonally adjusted, but the speed of growth has slowed in recent months and there are wide regional differences across the five Scottish regions surveyed.
Three of the five Scottish regions saw rents increase in the year to February, led once again by growth in the Highlands & Islands where prices are up 10% year-on-year, hitting an average of £644pcm.
Prices also rose in Edinburgh & Lothians and Glasgow & Clyde.
The biggest fall came in the south of Scotland where prices dropped 2.3% year-on-year. The average property now costs £548pcm to rent.
The East remains the cheapest place for tenants to rent a property in Scotland.
Landlord returns north of the border continue to compare strongly to England and Wales, with the average property in the country delivered a return of 4.7% to landlords, according to Your Move Scotland.
But while property investment in Scotland remains attractive when compared to the market in England and Wales, where the average yield stands at 4.4%, the average return delivered by property in Scottish has dropped from 4.9% a year ago.
The data from Your Move also shows that the proportion of tenants in arrears has remained stable at the 10% mark.
On an absolute basis, the number of households in serious arrears - defined as two months or more - was 8,542 during February.
Brian Moran, lettings director, Your Move Scotland, commented: “While growth has slowed compared to recent times, the Scottish market continues to grow at a healthy and steady pace.
“Yields remain strong compared to the average found in England and Wales, which will provide further encouragement to landlords looking to invest further.
“Encouragingly, tenant arrears have stabilised in recent months, meaning that landlords have more assurance over their investment.
“The outlook remains positive, although all landlords should check that their current letting agent is compliant with new rules from the Scottish government.”
Your Move is reminding landlords in Scotland that new rules have been introduced which affect the way letting agencies are able to conduct business on their behalf.
The Letting Agent Code of Practice was introduced on 31 January 2018 and all agencies are required to sign up to the new rules by 30 September 2018 if they wish to continue operating in the sector.
After this date it will be a criminal offence to conduct letting agency work if you aren’t on the register. Those breaking the rules could face a fine of up to £50,000 and up to 6 months imprisonment.
These rules are intended to increase professionalism in the sector and make sure that agents are properly able to handle money received from both tenants and landlords. Landlords should check that their agency is registered and is compliant with these new rules.
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