Throughout this year we have blogged about the strong position of the Scottish Private Rented Sector (PRS).
And now, as we approach the end of the year, we are at it again as there is plenty of data to suggest the rent rises in Scotland are significantly outpacing those south of the border. Great news for landlords if ever we’d heard any.
A recent buy-to-let index reported that as of last month, the average rent in Scotland is now 2.2% or £12 higher than a year ago. In England and Wales this average growth stands at a more meagre 1.5%.
The average national monthly rent is now back to around the £540 mark, recovering from a dip in September amid all the hype and speculation surrounding the referendum.
It seems pretty clear that one of the most significant contributors to our consistent average rent rises over the past couple of years was the banning of tenants’ fees in 2012. Although this meant many landlords have been forced to put their rents up (hence the higher figures), for many, this allowed them to rely on an even higher stable monthly income.
Our specific area, West Lothian, is consistently reported to be experiencing strong rental growth and again, this time alongside Edinburgh, it is topping the charts. According to the aforementioned buy-to-let index, average monthly rents in the Lothians have increased by 5.7%, equivalent to £33 of additional income in the twelve months to October just gone.
In the same timeframe the average rental yield in Scotland – the return on the investment after all costs – stands at 8.9% per property to let. This has almost doubled since October 2013, but is not quite as high as the peak of 9.4% we encountered earlier this year in June.
Not a week goes by without seeing an article or study about the strength of buy-to-let against other types of investment. The latest, released this week by Lloyds, ranks residential property as the third highest asset class for investors this year, behind only commercial property and global equities – comfortably beating UK and international bonds, UK shares and cash.
The case for the reliability of property investment can be further bolstered by some more findings. Across the whole of the UK the proportion of tenants facing serious arrears of more than two months is just 1.4%. Already minuscule, and with improving economic conditions as we move through 2015, this figure will only decrease further.
Find out how much your rental properties could earn each month using our online free property valuation tool. Additionally, for any advice or further information on the rental market in West Lothian, please contact Letting Solutions on: 0845 520 1420.