Posts with tag: Scottish rents

Scottish rental market slowed in May

Published On: July 4, 2017 at 11:59 am

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The latest report from Your Move Scotland has revealed that the Scottish rental market slowed during May, with prices falling ahead of the UK General Election.

As such, the average rent in the country stood at £561 in the month- a fall of 2.3% from April but 2.2% greater than in May 2016.

Performance

Prices in key city centres of Scotland continue to perform strongly- as have rural regions, such as the Highlands and the South. These areas are highly attractive to people relocating.

Four of the five regions in the survey saw rents rise during the last year. The front-runner was the South of Scotland, where rents rose by 8.8% in the last year.

Other regions to see year-on-year increases were the East (3.3%), Highlands and Islands (3.2%) and Edinburgh and Lothians (2.6%).

The only region to see a fall in prices year-on-year was Glasgow and Clyde, where prices slipped by 0.3%.

Scottish rental market slowed in May

Scottish rental market slowed in May

Returns

Landlords in Scotland are continuing to see strong returns, despite the overall fall in rents. The average yield in May was 4.9%- the same rate as recorded one year ago.

However, tenant finances were not as healthy, with 12.3% of tenancies having arrears on one day or more during May. This was slightly higher than the 11.3% recorded in April.

Brian Moran, Lettings Director of Your Move Scotland, observed: ‘With the General Election taking centre stage throughout May, it should come as no surprise that rents ticked down from their previous level.’[1]

‘Prices in most areas remain above where they were a year ago, with growth coming across a number of areas. Tenants are drifting towards city centre living or completely rural life as it was these areas which saw the most interest during May,’ he added.[1]

[1] http://www.propertyreporter.co.uk/landlords/scottish-rental-market-pauses-for-breath-in-may.html

 

Average Scottish rents up 2.3% year-on-year

Published On: February 24, 2016 at 1:00 pm

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Latest index figures reveal that average rents in Scotland rose by 2.3% in the year to January 2016. However, month-on-month rents stayed static at £548.

The buy-to-let index from lettings agent Your Move also shows that this figure is being driven by larger increases in regions such as Edinburgh and the Lothians. Here, rents were up by 6.4%.

On the other hand, rents in the East of Scotland were down 1.7% than one year ago and fell by 0.2% year on year in Glasgow.

Lesser returns

A reduction in house price growth north of the border is having an impact on landlords’ returns, which fell by 5.8% in the year to January. In better news, arrears have slipped to their lowest levels for six months, with 11.1% of tenants late paying rent in the last month. Previously, arrears had risen the Autumn to stand at a record high of 13.8% in October 2015.

Tenants’ finances though are down on twelve months ago. In January 2015, just 7.1% of all rent due was paid late.

On average, Scottish rents rose by 2.3% in the year to January 2016, equivalent to £12 in absolute terms. This represented only slight increase from the 2.2% recorded in the twelve months from December, though does show an increase in comparison to the 1.3% yearly rise seen in January 2015.

Rental patterns

Brian Moran, lettings director at Your Move Scotland, noted, ‘in different parts of Scotland, powerful interplays between supply and demand are shaping the regional rent patterns that are emerging. In popular cities like Edinburgh where the jobs market is hottest the competition to find homes means tenants have to act quickly. As a result, we’re seeing exceptional rent growth in some parts of the country while in others, lettings market activity is much calmer.’[1]

‘However, there’s also another ingredient added to the mix now,’ he continued. ‘The private rented sector is in a state of uncertainty, as landlords wait with baited breath while the Private Tenancies Bill progresses through the Scottish Parliament. Nervous landlords may be acting now before their hands are tied and they lose control of the rent they can charge. This could have prevented a seasonal dip between January and December instead of the steady picture we have seen.’[1]

Average Scottish rents up 2.3% year-on-year

Average Scottish rents up 2.3% year-on-year

Good news

Mr Moran believes that the rental increases are, ‘underpinned by good news.’ He went on to say, ‘we should also be looking at tenants’ bottom line. Arrears are falling which speaks volumes for affordability right now. With rents below their price peak, many tenants have been seizing the opportunity to move out of season, while good deals are available.’[1]

Regionally, three of the five regions of Scotland have seen rent rises in the year to January 2016. Rents in Edinburgh and the Lothians have now reached a record level of £642 per month. The 6.4% annual growth recorded in this region represents a steep increase, up by 4.8% in the year to December 2015.

This is not the only area to see record breaking year-on-year rent climbs. Rents in the South rose by 6% in the year to January and in the Highlands and Islands, rents increased by 3.7%.

At the other end of the scale, the East of Scotland saw rents decline by 1.7% over the same period.

Monthly dips

The majority of regions in Scotland saw rents slide between December and January. The sharpest drop was in Glasgow and Clyde, where rents were down 0.7%. Rents in the East of the country fell by 0.5% in January, with the Highlands and Islands recorded a decline of 0.2%.

Taking into account property price growth and void periods, the average landlord in Scotland saw a total annual return of 5.8% in the year to January 2016, before deducting costs such as mortgage repayments.

Moran concluded by saying, ‘we’re not on the home straight just yet. The Scottish unemployment rate is still above UK levels and parts of Scotland are also on the frontline of the current oil price slump. Wider economic factors will be decisive in determining whether tenant arrears continue in this downward direction.’[2]

[1] http://www.propertywire.com/news/europe/scotland-residential-rents-index-2016022411594.html

[2]http://www.propertyreporter.co.uk/landlords/scotland%C3%A3%C2%A2%C3%A2%E2%80%9E%C2%A2s-tenants-move-back-into-the-black.html

 

 

Scottish rents rise in December

Published On: January 27, 2016 at 10:08 am

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The most recent Scotland Buy-to-Let Index from Your Move indicates that there was a surprising end of year increase in Scottish rental growth.

Data from the report shows average residential rents north of the border rose by 0.4% in December-the highest monthly rent rise recorded since June. In addition, this was a more substantial rise than the 0.1% in November.

Rises

This increase brought the average monthly rent in Scotland to £548.

Annually, rental growth is also starting to show considerable rises. Year-on-year rental growth had been on the decline since June 2015, where they stood at 3.1%. December however marked an upturn in annual growth, with Scottish rents now on average 2.2% greater than one year ago, up from 1.4% in the twelve months to November.

‘On average, Scottish rents closed the year £12 higher per month than where they started,’ observed Brian Moran, lettings director at Your Move Scotland. He said, ‘that could stack up to a not inconsiderable £144 extra for some tenants over a twelve month contract. As we enter 2016, it’s encouraging news that the majority of Scottish tenants can afford higher rents-and that arrears have dropped for the second month in a row in December.’[1]

Scottish rents rise in December

Scottish rents rise in December

Reignited

Moran feels that, ‘Scottish rent rises have been ignited again recently by the improvement in wages and the gains made in the jobs market, while the supply shortage continues to fan the flames. Outside of the summer months, the New Year often sees the second biggest cycle of new tenancies and ushers in a busy time for the lettings market.’[1]

‘It’s the period where people typically take up fresh career opportunities and implement new life changes-and this wave is already evident in the uptick of rents over November and December, as savvy tenants act quickly to beat the January rush,’ he continued.[1]

Concluding, Moran noted that, ‘as the year progresses, other artificial factors will come into play. The Scottish Government decision to agree with George Osborne’s extra 3% of duty on the purchase of second homes is likely to distort the natural flow of the market, with any further buy-to-let investment likely to be front-loaded into the early months of the year. Once that deadline passes and if investment into the private rented sector becomes more hesitant, tenants’ rents may become much more exposed to the problem of supply.’[1]

[1] http://www.propertyreporter.co.uk/landlords/scottish-rents-see-end-of-year-surge.html

 

Scotland rent arrears rise

Published On: July 23, 2015 at 9:15 am

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A worrying report suggests that tenant arrears in Scotland are rising, despite letting agents’ fees on tenants being banned.

These types of fees are legal in England and Wales and experts commonly point to these costs as a reason why tenants are struggling financially.

Rise

Data from research conducted by Your Move indicates the proportion of rent arrears north of the border rose marginally from 8.8% in May to 9% in June. The growth was more substantial when assessing year-on-year data, with arrears standing at 6.1% in June 2014.[1]

‘It’s become clear over the past year that this isn’t a problem that’s going to fix itself, ‘said Brian Moran, lettings director at Your Move Scotland. ‘Greater supply of homes to let is the only way to definitively address the housing shortage and ease the financial pressure in the market.’[1]

Broader yields

More extensive rental data indicates that Scottish private sector rents have risen to stand 3.1% higher than one year ago. This means that the average rent in the country is £549 per month, with an increase of 0.8% in June alone.[1]

Scotland rent arrears rise

Scotland rent arrears rise

What’s more, rents have reached record highs in traditionally more affordable parts of Scotland, such as the East, South and Highlands.

‘It’s not just the big urban centres of Edinburgh and Glasgow which are coming up against an urgent shortfall of housing-there is furious demand for homes to let the length and breadth of the nation and that is underpinning this build-up in rental prices,’ observed Moran.[1]

Buoyant total annual returns are providing a welcome boost to landlords across Scotland – and represent a nice perk above steady monthly rental income. But most importantly, rental yields are also cruising along on an even keel, and have absorbed some of the recent shockwaves of the new Land and Buildings Transaction Tax, which has disrupted the course of property price growth more recently,’ Mr Moran added.[2]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2015/7/arrears-rising–even-in-area-which-bans-letting-agent-fees

[2] http://www.propertyreporter.co.uk/landlords/scottish-rents-up-31-year-on-year.html

 

Scottish rents reach new peak

Published On: June 25, 2015 at 9:59 am

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Categories: Landlord News

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Buy-to-let property owners north of the border have reason to smile with the news that the average rents in Scotland rose to a record-high last month.

Your Move, one of Scotland’s biggest letting agent networks, indicate that rents now average £544 per month, after a record monthly increase of 1%, coupled with a yearly rise of 2.7%. The record rise was helped by a 1.9% increase in South Scotland, which was the biggest regional increase.[1]

Increases

Annually, the rise of 2.7% for the year to May was a substantial rise on the 1.3% and 1.6% growths recorded in the twelve months to March and April respectively.[1]

‘After a downtrend in rent growth over the winter months, we’re back on par with the rate of rises a year ago,’ proclaimed Brian Moran, lettings director at Your Move Scotland. ‘In fact, at the same time last year, rents were rising at a moderately faster pace, with 2.8% annual growth in May 2014,’ he continued.[1]

Mr Moran points out that affordability remains a big stumbling block that is holding back private sector rents from rising more quickly. However, boosts in wages have led to confidence that tenants will begin to be able to pay more.

‘This needs to go hand in hand with supply,’ Moran notes. ‘With a strong economy and sturdy jobs market, demand for homes to let is standing tall. The stock of available housing needs to rise to match this level to maintain the delicate balance with rent rises and tenant incomes.’[1]

Location hikes

Rents have increased in all but one of the five regions across Scotland. Yearly, rents in Glasgow and Clyde have seen the most movement, increasing by 5.7% bringing the typical rent to £566. Other significant rises were evident in South and East Scotland, with rents in these regions up 2.7% since May 2014.[1]

Edinburgh and the Lothians was the only region where rents have fallen annually, The average monthly rent is now 0.6% lower than it was at this time last year.

On a monthly basis, rents were up across the whole of Scotland, particularly in the South, where rents were up 1.9% on April. This has resulted in a new record high of £510 per month. Additionally, the Index shows that the average gross rental yield on a rental home north of the border is currently 3.6%. Despite being consistent with last month, this represents a fall from the same time last year, when yields were around 4%.[1]

Scottish rents reach new peak

Scottish rents reach new peak

Returns

The Index also shows that the total average annual return for a rental property in Scotland was 17.3%, in the year to May. This figure takes into account house price growth and void periods, but is the total before costs such as mortgage payments or maintenance. A significant rise from the same period last year was recorded, when returns were just 8.9%.[1]

‘Double digit total annual returns are a great bonus for existing Scottish property investors and put them head and shoulders above their counterparts south of the border, with returns in England and Wales currently standing at 9.5%,’ noted Moran. ‘‘However, gross yields in Scotland have slipped back slightly as a side effect of the recent property price bump and fervent activity in the Scottish housing market, as the new Land and Buildings Transaction Tax comes into play. But with rent rises gathering pace, the case for investing in buy to let is still shining bright. This inflation of rental income ensures a good cushion for landlords, ensuring a smooth ride over any fluctuations over longer-term property price gains,’ he continued.[1]

Concluding, Mr Moran said that, ‘the only thing that could seriously sour the taste for landlords is the implementation of further tenancy regulation and legislation in Scotland. This threatens to dissuade new investment into the sector and limit the selection of homes to let available for tenants, which would brew up stronger competition and subsequently price rises.’[1]

[1] http://www.propertywire.com/news/europe/scotland-home-rental-index-2015062410665.html