Scottish rental market is two speed

Michael Lloyd

August 6, 2018

Average rental prices in Edinburgh and Lothians, Glasgow and Clyde, and Highlands and Islands regions all grew compared to a year ago while the average prices in in the East and South regions declined in the same time period, Your Move Scotland has found.

In the Edinburgh and Lothians region there was an average price increase of 2.9% in the year to June. The typical property in this region now stands at £680 and is the most expensive place to rent in Scotland.

In the East of Scotland, rental prices fell by 2.5% year-on-year to hit £527. The other fall was in the South of Scotland, the average property in this area now lets for £547 following a fall of 3.9% in the last year.

The strongest growth was seen in the Highlands and Islands, where prices have grown by 10.9% in the last 12 months.

Brian Moran, lettings director, Your Move Scotland, said: “There are still strong variations in rents across the different areas of the nation.

“The major cities of Edinburgh and Glasgow continue to post price rises while more rural areas have gained less traction.

“Despite these regional differences, the Scottish rental market as a whole continues to offer much higher returns than much of England and Wales.”

The average rental price across all areas of Scotland rose by 0.1% in the last 12 months to reach £572 on a seasonally adjusted basis.

The average price in the region now stands at £668.  Close behind was the Glasgow and Clyde region. Here the average property now lets for £598 per calendar month, following growth of 9% in the last year.

The East and South of Scotland remain the cheapest places to rent in the country, with the gap between these and the other regions widening.

The Scottish property market continues to deliver strong returns for landlords and other investors with the average yield returned to property owners 4.7% this month, the same as in May.

This return continues to compare favourably to the returns achieved by landlords located in England and Wales.

Across both nations the average yield was 4.4% this month. The only regions of England to post stronger returns than the Scottish average during June were the North East (5%) and North West (4.8%).

There was a sharp decline in the number of households in arrears in June, suggesting last month’s rise was down to one-off factors.

The percentage of households in arrears was 10.6% this month, significantly down on May’s 17.4%, but in line with the months before that.

On an absolute basis, the number of households in serious arrears – defined as two months or more – was 10,402 during May.

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