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Mixed picture as rents rise and yields fall in Scotland

by: Carmen Reichman
  • 09/12/2016
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Mixed picture as rents rise and yields fall in Scotland
Scottish rents outperform expectations after rising 0.3% in October, while buy-to-let yields declined, research from Your Move has found.

With typical properties now letting for £558 per month, this presented a rise of 0.4% on last year, with best performing regions Edinburgh and the Lothians up by as much as 6.1%, the firm’s latest buy-to-let index showed.

However, at the same time yields ticked down between September and October, with rental properties typically returning 5% in October, down from 5.8% recorded in September. Despite this, yields were still up on last year, when Scottish properties returned 4%, Your Move said.

Lettings director for Scotland Brian Moran said: “Landlords have been thrilled with the performance of Scottish rental properties in recent months, and October again showed how strong this market is.

“This month yields may have fallen but they remain much higher than equivalent properties in England and Wales.”

He added: “The excellent performance of the Edinburgh and Lothians region shows that London is not the only UK capital city with a booming property market.”

Moran said the biggest development in the region was around the improvement of tenant finances, which meant fewer landlords were facing problems with late and non payment of rent.

Across Scotland some 7.9% of all tenancies had arrears of a day or more in October 2016, Your Move said. This was down on 12.5% recorded in the previous month and 13.8% recorded in October last year.

By comparison, across England and Wales the average rate of arrears was 9.3% during October.

Competitive market

According to the index, landlords in Scotland continue to see better returns than their counterparts in England and Wales, where the average yield in October stood at 4.7%, with only properties in the North East and North West regions of England seeing better returns (5.3% and 5.1% respectively).

The were still areas in which rent prices dropped, however. The worst performers in the month were Glasgow and Clyde, which saw a drop of 0.2% on September and were down 1% year-on-year.

Although landlords with properties in the Highlands and Islands were able to enjoy higher than average rents, prices have tumbled a staggering 8.1% in the last 12 months, Your Move said.

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