Private sector rents increased slightly in Scotland at the end of the summer due to restricted to supply in popular areas with the average reaching £579 in August, a rise of 0.5%, the latest index shows.
Average rents increased in four of five regions surveyed by the Your Move buy to let index with the Glasgow and Clyde region is the only region to record a year on year fall, down 4.1%.
Edinburgh and the Lothians remains the area with the highest rents at £666, some 4.1% higher than August 2016 and the lowest in in the East of Scotland at £540 which is up 2.5% compared to a year ago.
The index also shows that the typical yield was 4.9% during August, unchanged from the previous month and from August 2016. Indeed, throughout 2017, returns on Scottish property have been between 4.9% and 5%.
Brian Moran, Your Move Scotland lettings director, said that this demonstrates the stability offered by the rental market in Scotland and the positive returns on offer to investors.
‘Rental prices are increasing across much of Scotland thanks to high levels of demand and poor supply in many areas, particularly in Edinburgh which saw prices rise by 4.1% over the year,’ he explained.
He pointed out that while Scottish landlords continue to see returns close to 5%, it is important that they now prepare for upcoming changes, most notably the Letting Agent Code of Practice which is due to come into force at the end of January 2018.
‘Landlords should be talking with their agents now to make sure they are prepared for the changes and understand what it means for them, sooner rather than later,’ said Moran.
From 31 January 2018, agents in Scotland will be able to declare themselves compliant with this new legislation and join a Register of Letting Agents. These changes are expected to cause significant disturbance for smaller agencies, with many expected to close or leave the market.
Your Move Scotland is urging all landlords and property investors to enquire with their current agent to ensure they will be compliant with the new rules. Letting agencies must have submitted an application to join the code of practice by 30 September 2018. From that point 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. Moran pointed out that these 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.
