Average rents in Scotland fell in May 2017 to £561, a fall of 2.3% compared to the previous month but still 2.2% higher than a year ago, the latest buy to let index shows.
Rental prices in major city centres continued to perform strongly, as have rural areas such as the Highlands and South of Scotland which are proving to be highly attractive to people relocating.
Four of the five regions surveyed by the Your Move Scotland buy to let index saw rents increase in the last year, led by the South of Scotland where rents increased by 8.8% in the last 12 months.
The other regions to post increases in the last 12 months were the East of Scotland with a rise of 3.3% year on year, the Highlands and Islands up 3.2% and Edinburgh and the Lothians up 2.6%.
Glasgow and Clyde was the only region to see a fall in rents year on year, down 0.3% compared to May 2016 and on a monthly basis rents were also down with a fall of 1%.
The Highlands and Islands saw the biggest monthly increase with rents up 1.2% to reach an average of £603. This figure was buoyed by more people looking to move into rural areas. While Edinburgh and the Lothians continues to have the highest rents in Scotland, up 0.1% month on month to £656.
Despite the overall fall in rents property investors and landlords continue to see high yields on returns on their properties with an average yield of 4.9% in May, almost as same as the 5% recorded in the previous month.
The high yields offered by properties in Scotland compare strongly to property investment in other parts of the UK. Landlords in Scotland saw much better returns than the typical investor in England and Wales, where the average yield in May was 4.4%.
Indeed, only landlords with properties in the North East and North West regions of England enjoyed higher or equal returns at 5.2% and 5% respectively in May.
‘With the general election taking centre stage throughout May, it should come as no surprise that rents ticked down from their previous level. Prices in most areas remain above where they were a year ago, with growth coming across a number of areas,’ said Brian Moran, lettings director of Your Move Scotland.
‘Tenants are drifting towards city centre living or completely rural life as it was these areas which saw the most interest during May. The Highlands and Islands saw prices rise sharply compared to last month while in the South rents are 8.8% more than a year ago,’ he added.
