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Rental yields in Scotland continue to perform strongly

Landlords in Scotland continue to have more reason to cheer than their counterparts in England and Wales, according to new research on rental yields.

Rental yields in Scotland have performed more strongly than in England and Wales in the last 12 months. While returns outside of Scotland have been squeezed, north of the border they have remained very solid.

The average rental property in Scotland offers landlords and investors yields of 4.9%, which is exactly the same as a year ago.

While further rises would have been welcomed, it’s promising to see Scottish returns remain robust despite external pressures, not least the ongoing uncertainty over Brexit and the weakened minority government at Westminster.

The findings, for the year up to June 2017, also show that rental growth is happening across most of Scotland, with the average rent currently standing at £569pcm. This is 1.8% higher than last June, when debate surrounding the EU referendum had reached fever pitch and the typical rental price was £559. Rents were also up by 1.4% on May 2017.

The spread of rental growth has been fairly even across the country, but some areas are outperforming others. Edinburgh and the Lothians – which includes the areas we operate in at Letting Solutions – is still the region with the highest rents, with an average rental value of £661 per month. The last year has also seen strong growth in this region, up by 3.5% since last June.

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Looking at things on a monthly basis, we find that most parts of Scotland witnessed a rise in rental prices. Edinburgh and the Lothians once again led the way, with rents rising by 0.8% – the highest of any region.

Rental yields in Scotland are currently the embodiment of stability, but in England and Wales investors have seen their returns squeezed in the last year, presently standing at 4.4%. Only landlords with rental homes in the uppermost parts of England – the North West and North East regions – experienced higher rental yields than those in Scotland, of 5.2% and 5% respectively.

The reasons for this are fairly simple – property in Scotland and the north of England tends to be cheaper, while tenant demand is still high. This means landlords and investors can purchase property on the cheap and still charge decent rents. In turn, rental yields are less squeezed than they would be in other parts of the UK where property is more expensive.

In these unpredictable, topsy-turvy times, landlords and investors in Scotland will be pleased to see how strong and stable the market is. While politics has thrown up a fair few surprises in the last year or so, none of this seems to have affected the Scottish rental market and its slow but steady progress.

Landlords in England and Wales may, too, be looking on jealously at the higher rental yields being achieved north of the border. In our previous blog we looked at why Scotland is a great place for landlords and investors to invest in, and why English investors are increasingly looking northwards, and this latest research reaffirms that stance.


For more information about what Letting Solutions offer, please get in touch with us on 01506 425693.

As West Lothian’s first dedicated lettings agency, we also provide instant online valuations to give you an idea of how much your rental property could be worth in the current marketplace.