Rental yields in Scotland increased sharply in July due to both higher rents and rising house prices in many areas of the country, new figures show.
The Your Move Scotland Buy-to-Let Index for July, released this morning, reveals that the average gross rental yield for properties in Scotland increased to 5.8% in July, up from an annual rise of 4% in the corresponding month last year.
Yields in Scotland compare favourably with all regions of England and Wales. By comparison, the highest yields in England are to be found in the North East, where they reached 5.5% in July. In Wales the typical yield was 5.1% during the same month.
Properties in Scotland attracted an average rent of £574 per calendar month (pcm) in July, Your Move found, 4.6% higher than a year ago, which suggests that UK’s decision to leave the European Union has had no negative effect on rents.
Brian Moran, lettings director, Your Move in Scotland, said: “Despite murmurings of uncertainty since the EU referendum, rents have remained strong in the period since the vote.
“Demand for rental properties in all areas of Scotland has shown no sign of slowing down with rents rising by 4.6% in the past year.”
Moran insists that relatively low house purchase prices, at an average of £143,282 in July, according to data from Your Move, coupled with higher rents in many areas make Scotland “a popular place for property investment”.
On a regional basis, the Edinburgh and Lothians area was home to the highest rents in Scotland. Properties in the capital and surrounding areas attracted rent of £639pcm in the month of July, up 4.4% year-on-year, although marginally down on April’s average rent of £651pcm.
Prices in the Glasgow and Clyde area have been quickly catching up in the last 12 months. The average monthly rent in this area rose by 11.7% in the past year, rising from £562 to £628.
The East of Scotland region saw much slower rental growth during the same period. Prices in this area now stand at £539pcm after growing 1.5% since July 2015.
“Gross rental yields of 5.8% in Scotland compare favourably with all areas of England and Wales,” Moran added.