It’s always pleasing to read positive, upbeat news regarding the rental sector, so landlords in Scotland will be keen to know that the start to 2017 has been a good one for anyone with a stake in letting property.
The Scottish rental market has experienced a strong, positive start to the year, with recent research from a large property firm revealing that average rents in Scotland are now approximately £570 a month, up by around 4% from the year before, when they stood at just below £550 a month.
Despite Brexit, stamp duty changes and the impending phasing out of mortgage interest tax relief, the private rented sector is staying strong and resilient, with demand still high and landlords achieving strong rental yields.
Edinburgh and the Lothians (East, Mid and West) witnessed the strongest yearly growth in rental prices, at 3.3%, although the monthly change between January and February 2017 remained flat.
The cheapest places to rent are all based in the East of Scotland, including Fife, Dundee and Perthshire, where rental prices are £533 a month on average.
Rising rents are nothing new, and the cause isn’t hard to nail down. Tenant demand for rental properties in Scotland continues to increase while supply is down. As such, landlords have a wide pool of potential tenants to choose from and the confidence to know that rental income will be steady, consistent and steadily rising. While the supply/demand balance exists, and this is only likely to become more acute when the changes to mortgage interest tax relief come into play and some landlords look to downsize their property portfolios, prices will continue to increase.
With house prices in Scotland also on the increase, more people are turning to renting for the long-term as a more affordable measure. This, once again, widens the number of tenants that Scottish landlords can target their property towards.
There are, of course, challenges ahead for landlords, in particular with the changes – from April 2017 – to mortgage interest tax relief. In a previous blog we explained how these changes can be mitigated against, but it’s still likely to pose a few complications in the short to medium-term as everyone gets used to the new system.
In addition, there is the ongoing uncertainty over Brexit and the triggering of Article 50, and the political and economic uncertainty this is causing, with question marks over the free movement of people and the rights of EU nationals living in the UK and British nationals living on the Continent.
That said, there are many reasons to be positive. Landlords should feel confident about consistent demand, therefore batting away fears of any dreaded void periods, while decent rental income is entirely possible if homes are marketed in the right way in the right areas. A clean, well-maintained, inviting rental property will, of course, be far more appealing than one that is shabby or falling into disrepair, so it’s vital that landlords get their homes in tip-top condition and give no reason for would-be tenants to turn away.
To make the most of your rental property, and to receive the highest gains on your investment over time, it’s a wise move to work closely with an experienced letting agent, to help you understand the local market and get all the necessary documentation in place. As a landlord, there are many regulations and laws you have to adhere to, so having an expert on your side takes away the stress and hassle this could cause.
A good agent will also advise you on the best places to purchase property and point out if your rental homes need refurbishment or redecoration works. They can also get your homes occupied with reliable tenants in a fast, efficient and hassle-free way, deal with any issues or repairs, and minimise your chances of encountering void periods by ensuring a smooth transition between the end of one tenancy and the start of another.
At Letting Solutions, West Lothian’s first dedicated lettings agency, we understand full well the concerns that landlords have – ranging from deposits and property maintenance to capital gains and the protection of your asset – and we look to offset these concerns by managing tenancies with the minimum of fuss, keeping our clients updated at all times.
For more information about letting your home in West Lothian, please give us a call on 01506 496 006.