Recent research by a large letting agency has shown that Scottish tenants are moving back into the black, with improving household finances now allowing for late rent to be paid off.
Late rent has now reached a six month low, with just 11.1% of January rent falling into arrears.
This was down from 11.4% in December 2015 and signifies the lowest level of late rent in Scotland since July 2015.
Arrears were becoming much more of a problem in the autumn of last year, leaping to a record high in October 2015 of 13.8%.
Since then things have steadily got better – with Scottish tenant arrears now having dropped for the last three months in a row.
Higher levels of employment and improving finances have helped tenants to feel more in control of their incomes and, in turn, the rent and bills they owe.
All this, of course, is excellent news for landlords. Late rents only cause uncertainty, disruption and insecurity, for both you as a landlord and for your tenants.
It’s not a good situation for anyone, so this is certainly pleasing news that tenant arrears are now falling.
With a landlord’s rental income now safer, it may encourage more first-time landlords to enter the market. As the pressure increases on the PRS due to high demand for rental properties, more landlords is what the market needs.
If return on investment and good rental yields are more likely to be guaranteed, it stands to reason that more landlords/investors will be encouraged to plough their money into the sector.
The situation still isn’t completely rosy – tenant finances are still worse off than they were a year ago (in January 2015 just 7.1% of all rent owed was paid late) – but in early 2016, things have definitely taken a step in the right direction.
As we speak, tenants are currently much more confident in their ability to keep up with rental payments and bills. The slump in the price of oil and the uncertainty surrounding the global economy are two potential issues over the coming year or so, but all the indications are that Scottish tenants arrears will continue a downward trend.
The research also offered further good news for those landlords who operate in the Lothians, where the fastest yearly rent increase on record has been witnessed.
Edinburgh and the Lothians have seen a 6.4% rise in rents since January last year, with rents in January 2016 rents £38 higher than a year before.
Furthermore, average monthly rents in Edinburgh and the Lothians have now hit a record high of £642 per month, well ahead of the average monthly rent across Scotland of £548 per month.
As West Lothian’s most experienced and knowledgeable lettings agency, here at Letting Solutions we will do everything we can to manage your property in a professional, efficient manner and ensure that you get the appropriate levels of rental income from the homes you let out.
For more info please get in touch with us on 01506 496006. To find out how much rent you could be charging, check out our free and instant online valuation tool.