All Scottish regions see rents rise

Photo: Stuart Caie

All regions of Scottish regions have seen rents rise, as demand for family properties pushes up prices.

The average Scottish rent is 3.8 per cent higher in March 2017 than a year ago, according to Your Move Scotland. The average property is now let for £565 per calendar month.

Increased demand and insufficient supply of family properties was one of the driving forces. This has been most keenly felt in the Highlands and Islands region, where rents increased faster than anywhere else between February and March.

Brian Moran, Lettings Director, Your Move Scotland comments: “March saw a stellar performance across Scotland as every single region recorded higher rents than the previous month. Demand is increasing in segments of the market such as family homes, showing there is room for expansion of the rental sector.”

“This increased demand is being seen in areas such as the Highlands and Dumfries, suggesting the rental sector is extending beyond the big cities. Yield levels have actually increased this month, bucking the trend seen in the rest of the UK. This shows Scotland remains a great place to invest, as well as a great place to live.”

 

Scottish rental market enjoys positive start to 2017

10th March 2017

Scotland’s rental market has enjoyed a positive start to 2017, with rents up 4 per cent in the last year.

Compared to the same point in 2016, many regions across the country saw rents grow, with the average proeprty now letting for £571 per month, according to Your Move Scotland.

Edinburgh and the Lothians was the region with the highest rents and has also seen the strongest growth in the last 12 months. East of Scotland, including Fife, Dundee and Perthshire, remains the cheapest place to rent.

Yields are exactly the same as a year ago, which suggests the Scottish rental market continues to attract quality investment into its housing stock. Despite 2016 containing changes to the tax system for buy-to-let landlords, the UK’s vote to leave the European Union and general economic uncertainty, the average yield was 4.9 per cent in January 2017, unchanged from January 2016 and the previous month.

“It was a strong start to the new year for many landlords across Scotland as rents continued to perform well,” says Brian Moran, Lettings Director, Your Move Scotland. “Despite new government rules which cut tax relief on buy-to-let properties making business more complicated for landlords, yield levels have remained strong in the past 12 months.”

 

LBTT surcharge pushes up Scottish rents to new high

22nd June 2016

The Land and Buildings Transaction Tax (LBTT) surcharge in Scotland has pushed up rents to a new high, according to the latest Scotland Buy-to-Let Index from Your Move.

Average residential rents in Scotland shot up 1.3 per cent in May 2016 from April, the fastest month-on-month growth on record. This increase took the average rent to £549 per month, the highest Scottish rents have been ever been, surpassing the previous record set in July 2015.

Brian Moran, lettings director at Your Move Scotland, comments: “Rents are rising rapidly as a result of the new Land and Building Transaction Tax surcharge for buy-to-let properties. This tax hike has dissuaded landlords from investing in the sector leading to a shortage of homes to rent, compared to the demand for housing. With the limited supply of rental properties, potential tenants have been forced to compete to secure homes, pushing up rents. The introduction of this anti-landlord legislation from Holyrood has ensured the cost of the policy has hit tenants hardest.”

On a monthly basis, rents rose across all of Scotland’s regions in May.

Glasgow & Clyde has seen the steepest uplift month-on month, with rents in the region increasing 1.9 per cent from April. This amounts to a £11 jump in cash terms, with typical rents increasing from £538 in April, up to £549 in May.

The smallest monthly upswing in rents occurred in the Highlands & Islands.

Meanwhile, in Edinburgh & the Lothians, rents continued their upward trajectory, rising 1.7 per cent (£11) from April, pushing the typical rent in the region to a record high of £662 per month.

Annual rent rises in Scotland at three-year low

25th May 2016

Annual rental growth in Scotland is at a three-year low, according to the latest Scotland Buy-to-Let Index from Your Move.

Average residential rents in Scotland have climbed 0.6 per cent in the 12 months to April 2016, in the slowest annual rise witnessed since March 2013. This marks a significant downturn in rates of year-on-year growth from 1.1 per cent recorded in March, and 2.1 per cent in February.

In absolute terms, this £3 annual increase means that the average rent in Scotland now stands at £542 per month. This is the lowest Scottish rents have been since they stood at £539 in April 2015.

On a monthly basis, typical Scottish rents have fallen for the second consecutive month, down 0.4 per cent since March. This is at odds with the trend seen south of the border, with average rents across England & Wales rising 0.3 per cent month-on-month in April.

Brian Moran, lettings director at Your Move Scotland, comments: “Tenants looking to rent a property now may find themselves able to bag a bargain, after a slight spring slump in rent growth. Rents haven’t risen at such a leisurely place for three years. “However, this year-on-year snapshot hides the many price fluctuations we’ve seen in between this April and last… The lettings market is always at the mercy of local supply and demand, and in Edinburgh and the surrounding areas we’re seeing extraordinarily fast rent rises, as tenant competition shines brightest around the glow of the jobs market.”

Over the last year, total annual returns for landlords in Scotland have stood at -4.8 per cent. This marks an improvement from a -5.6 per cent return over the year to March, but is still being adversely skewed by the introduction of the Land and Buildings Transaction Tax (LBTT) in April 2015, and the impact of this on sold house prices last spring.

Compared to last year, total annual returns have declined from 17.5 per cent recorded in April 2015, which was the result of inflated house prices feeding into considerable capital gains in the run up to the LBTT implementation.

As a result of this property value turbulence, in absolute terms the typical Scottish landlord has witnessed a paper loss, before any mortgage payments or maintenance costs, of £8,600 in the past year. This comes despite rental income standing at £5,900 over the past twelve months, with capital gains impacted by distorted sold house prices a year ago.

Nonetheless, the average gross yield on a buy-to-let property in Scotland stands at 4 per cent as of April 2016, holding steady on a month-on-month basis. Compared to a year ago, this marks an improvement from 3.7 per cent in April 2015.

Brian Moran concludes: “Our reading of landlord’s financial returns are going a bit wayward at the moment – but it’s a matter of waiting now until the anomalies of last spring drop out of view. With property prices climbing to a considerable peak before the introduction of the LBTT in April 2015, Scottish landlords haven’t seen any compelling capital growth in the past twelve months, to complement with their regular rental income. But that’s not to say it hasn’t been a wise investment… While total annual returns are in a state of flux, gross yields are the constant keeping a remarkably steady course – and offering landlords a much fairer and sunnier picture of the investment case.”

Scottish rents fall behind rest of UK

21st October 2015
Scottish rents are rising at less than a third of the rate seen in the rest of Britain, according to new figures.

The latest index from Your Move shows that average Scottish rents have risen just 1.7 per cent in the past year, less than a third of the rate currently being witnessed in England and Wales. While rents across England and Wales have soared by 6.3 per cent in the past 12 months, annual rent growth in Scotland has plateaued after a summer uplift.

Residential rents in Scotland fell 0.3 per cent from August to September 2015. This is the second consecutive monthly drop in Scottish rents, meaning that the typical rent in Scotland is now 0.8 per cent lower than at its summer peak in July.

The average monthly rent in Scotland now stands at £545 in September 2015, compared to £549 in July 2015.

The dip occurs amid the controversy of the Private Housing Bill, according to Your Move’s lettings director, Brian Moran: “All eyes are on the proposed reforms to the private rented sector in Scotland, but this appears to be a case of plenty of heat but no light. Rents are not going up quickly enough to warrant the staggering rise in tenant arrears we’re seeing. Rather, tenant finances have much more to do with deeper-rooted societal problems of salaries and employment levels.”

“Over the summer we witnessed a short-term surge in rent prices, but this has been superseded more recently with a slower rate of rent growth, which doesn’t even come close to what we’re witnessing south of the border,” he adds.

In September, rents are higher than last month in only two of the five regions of Scotland. Compared to August, Edinburgh & the Lothians has experienced the biggest increase in rents, climbing 1 per cent – equivalent to £6 – this boost takes the typical rent in the region to £623 per month, the highest level on record.

Edinburgh’s rise is backed up by figures from Landbay’s new Rental Index, powered by MIAC, which found that Edinburgh’s flats saw rents rise 12 per cent, ahead of Swindon (11 per cent) and Southend on Sea (11 per cent).

Rent rises for one bedroom flats accelerated sharply in September across the UK, sparked by high demand from recent graduates renting to live near their first job. Rents for one beds saw an annual rise of 3.9 per cent in September, up from 2.9 per cent in August, reaching an average of £1,054 according to the new index, which launched last month.

Indeed, this is “peak lettings season”, notes Moran, which adds weight to his argument against the Private Housing Bill.

“It’s certainly not a sector spiralling out of control,” he explains. “This auto-correction, and natural flow of the lettings market will be disrupted by artificial interventions from the Government. Private sector landlords could soon face a regulatory minefield, and this may dissuade future investment into buy-to-let at a time when we need to be the sector to grow, not contract.  Ultimately, where the supply of rental properties uncouples from demand, rent growth will be massively thrown out of kilter, and tenants will find themselves even more exposed.”

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