Scottish Rental Yields Continue to Perform Better than England and Wales

Scottish rental yields for landlords continue to perform more strongly than those in England and Wales, according to the latest index from Your Move Scotland.

While returns across much of England and Wales have been squeezed in the last 12 months, Scottish rental yields have remained solid. The average rental property in the country returns 4.9% to investors – exactly the same as a year ago.

Rent price growth

The Buy-to-Let Index for June 2017 also shows that rents have continued to rise across many parts of Scotland. The average rent in the country is now £569 per month – 1.8% higher than last June, when the typical price was £559, and up by 1.4% on May 2017.

The Edinburgh and the Lothians region continues to boast the highest rents in Scotland, at £661 per month. Prices in these areas have also enjoyed strong growth over the last 12 months. In June last year, the average property let for £639 a month, meaning that prices have risen by 3.5% in a year.

The only other area of Scotland to record rents above the £600 mark in June was the Highlands and Islands region, where the average price hit £602 – 2.9% higher than last year.

At the other end of the scale, the East of Scotland, including Aberdeen, is currently the cheapest place to rent in the country. The average price here is £541 per month.

On a monthly basis, prices rose in most parts of Scotland. The Edinburgh and the Lothians region saw rents increase by 0.8% – higher than anywhere else.

The South and East of Scotland both experienced growth between May and June, of 0.4% and 0.1% respectively.

Scottish rental yields

Scottish rental properties continued to reward landlords with high returns in June, Your Move Scotland also reports.

Across the country, the average yield was 4.9% during June, which is exactly the same as both May and June 2016.

This stability compares favourably with properties in England and Wales, where investors have continued to see their yields squeezed over the past year.

In June, the average yield in England and Wales was 4.4%. Only landlords with properties in the North East and North West of England enjoyed higher returns than those in Scotland – 5.2% and 5.0% respectively.

Tenant finances 

Across the entirety of Scotland, some 18.3% of tenancies had rent arrears of one day or more during June, the index reveals.

This is higher than the 12.3% recorded in May, suggesting that tenant finances have deteriorated. Scotland’s arrears rate remains above the level seen in England and Wales. Across both nations, the average level was 7.0% in June.

The Lettings Director of Your Move Scotland, Brian Moran, says: “Slow and steady is the name of the game in Scotland. While the political landscape has changed dramatically, the rental market continues its solid progress.

“Rents across Scotland are now 1.8% higher than a year ago and have risen by 1.4% in the last month alone.”

He continues: “Landlords are enjoying excellent returns on their investment, with the typical property returning 4.9% to owners – a strong performance in today’s economic context.

“Landlords south of the border will be envious of the Scottish market, as returns are much stronger than in most regions of England and Wales.”

Perhaps you’ll be encouraged to invest in Scotland thanks to the strong performance of Scottish rental yields?