The rental yields achieved by Scottish landlords remain highly competitive when compared to other asset classes, according to the latest index from Your Move Scotland.
The average rent north of the border reached £574 per month in September, which is broadly in line with the price recorded in August and in the same month last year.
Four of the five Scottish regions experienced rent price growth in the 12 months to September, led by increases in the Highlands & Islands, where prices are 5.6% higher than last year, hitting an average of £610 a month, which is significantly higher than the £576 seen in September 2016.
Scottish Landlords Achieving Strong and Stable Rental Yields
The next highest growth was recorded in Edinburgh & the Lothians, where the average rent rose by 4.5% in the past year to reach £669 a month, which is the highest average rent price in Scotland.
Glasgow & Clyde was the only region to witness a year-on-year rent price drop, with the average value down by 6% to £541 in September, from £579 in the same month last year.
According to Your Move, Scottish landlords achieved an average rental yield of 4.8% in September, which, although down slightly from the 4.9% recorded in August, is a significantly higher return than the majority of properties in England and Wales achieve, which is an average of 4.4%.
Only landlords with properties in the North East and North West of England enjoyed higher average yields than those in Scotland.
The Lettings Director of Your Move Scotland, Brian Moran, says: “With four of the five regions of Scotland showing price growth in the last 12 months, things are looking up for Scottish landlords. Returns remain highly competitive and landlords are enjoying greater stability from their tenants.”
However, Moran is urging all landlords in Scotland to prepare for upcoming changes to legislation.
From 31st January 2018, the Letting Agent Code of Practice will come into force, and agents will have to declare themselves compliant with the new scheme.
Letting agents will be legally required to join a register of agents, and Your Move Scotland is calling on landlords and property investors to enquire with their current agent as to whether they are complying with the new rules.
Letting agencies must have submitted an application to join the Code of Practice by 30th September 2018. From that point, it will be a criminal offence to conduct letting agency work if you are not on the register.
Those breaking the rules, which are intended to increase professionalism in the sector and ensure that agents are able to handle money from landlords and tenants effectively, could face a fine of up to £50,000 and up to six months’ imprisonment.
“The upcoming introduction of the Letting Agent Code of Practice means landlords should ensure their agent is ready for the changes,” Moran adds.