Rental price growth north of the border continued to outstrip the rest of the UK with an annual rise of 2.5% in October, according to the latest Your Move buy-to-let index.
The average property let for £572 per calendar month (pcm) on a seasonally adjusted basis, which is up 2.5% compared with October 2016 and in line with last month.
The latest growth rate in Scotland was higher – in percentage terms – than that achieved in England and Wales last month, with the average rent up 2.4% year-on-year, although rents remain much higher down south, at an average of £845pcm.
Four of the five Scottish regions saw rents increase in the year to October, led by growth in the Highlands & Islands where prices are 6.4% higher year-on-year, hitting an average of £613pcm, which is up from £610pcm a month earlier.
The Edinburgh & Lothians regions remain the most expensive in Scotland, with the average price standing at £669 per month.
Glasgow & Clyde was the only region to see a year-on-year price fall, with average rents in October hitting £543pcm, which is down 5.3% year-on-year.
According to Your Move, landlords in Scotland achieved a 4.8% yield on average on their properties, which although the same as September is lower than the 5% at the same point last year.
In comparison, the average yield achieved across England and Wales remained at 4.4% in October, the Your Move data found.
“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 at Your Move Scotland.
“Yet landlords need to be aware that some key legislation changes are on the horizon and they should be making,” he added.
Moran is urging all landlords in Scotland to prepare for upcoming changes in legislation.
He explained: “Changes to legislation means landlords will be required to register new leases in line with the Private Residential Tenancy by the 1st of December. 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.”
From 31 January 2018 the Letting Agent Code of Practice will come into force and agents will have to declare themselves compliant with this new legislation.
Letting agents will be required to join a Register of Letting Agents and 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 are not on the register.
Those breaking the rules, which is intended to increase professionalism in the sector and make sure that agents are properly able to handle money received from both tenants and landlords, could face a fine of up to £50,000 and up to six months imprisonment.