Average rents in Scotland increased by 2.5% in the year to October 2017, taking the average rent in the private rented sector to £575, the latest index shows.
The growth was led by the Highlands and Islands region with rents up 6.4% year on year to an average of £613, according to the buy to let index from Your Move.
In total, four of the five Scottish regions saw rents increase in the last year with only Glasgow and Clyde seeing a fall with a 5.3% decline year on year. However, rents in the region did increase by 0.3% between September and October, suggesting that the recent spell of price falls may be coming to an end.
The Edinburgh and Lothians region remain the most expensive in Scotland with an average rent of £669 per month, the index also shows.
Rent rises across much of Scotland helped keep landlord returns stable in October 2017 with an average yield of 4.8% in October, the same as during September but lower than the 5% figure recorded at the same point in 2016.
Yields in Scotland are currently higher than the average in England and Wales of 4.4%. On a regional basis, only the North East and the North West of England have higher yields at 5.1% and 5% respectively.
This month’s index report reminds landlords across Scotland to be prepared for the introduction of the Letting Agent Code of Practice from the end of January 2018. Letting agents will be required to join a register of letting agents.
Indeed, lettings agencies should be submitting their applications to join the code of practice and the deadline for doing so is the end of September 2018. From that point on, it will be a criminal offence to conduct letting agency work if you aren’t on the register. Those breaking the rules could face a fine of up to £50,000 and up to six months imprisonment.
The new rules are intended to increase professionalism in the sector and make sure that agents are properly able to handle money received from both tenants and landlords. Ahead of the code of practice being introduced there will also be changes to new tenancies beginning from December 2017.
All tenancies which commence from next month will be open-ended, meaning landlords will not be able to ask a tenant to leave after a fixed period. This is intended to provide a more stable environment for tenants, but also sets out specific circumstances in which landlords can remove problem tenants from their properties
‘As we approach the end of the year, the Scottish rental market continues to perform strongly when compared with other parts of the UK. With an average return of 4.8%, landlords have been rewarded with good returns throughout 2017,’ said Brian Moran, lettings director of Your Move Scotland.
‘Yet landlords need to be aware that some key legislation changes are on the horizon and they should be making sure that their letting agency will be compliant with the new rules. Changes to legislation means landlords will be required to register new leases in line with the Private Residential Tenancy by the 01 of December,’ he pointed out.
‘This will not affect landlords with live short assured tenancy agreements as these leases will remain the same until either party gives notices or it runs to its natural end date. The Letting Agent Code of Practice also launches in the new year, which means landlords should start preparing for these changes in good time,’ he added.
