Independence referendum ‘led to rent increases’
Uncertainty over the outcome of the vote led to a growth in the sector as cautious potential property owners delayed purchases and turned to renting as a stop-gap, according to the latest Scotland Buy-to-Let Index from Your Move.
The lettings agent found the average Scottish rent now stands at £537 a month, a £14 (2.7%) increase in the year to August.
Rents have risen across Scotland with new records set in Edinburgh and Glasgow at £602 and £575 respectively.
The growth in the sector accelerated as polling day approached, with average residential rents rising 1.3% in the three months to August.
Gordon Fowlis, regional managing director of Your Move, said: “While the independence debate has been raging, many households have been battening down the hatches and waiting to see which way the wind blows before buying property.
“This has boosted demand in the private rental sector, which has acted as a safe harbour and stop-gap on the journey to home-ownership.”
The average landlord in Scotland now has a return of £14,900 (9.9%) before mortgage payments and maintenance costs.
Mr Fowlis added: “Landlords are seeing their returns boosted by buoyant rental income, but the benefits are trickling down to tenants too.
“As an attractive investment opportunity, landlords are adding to the pool of rental properties available on the market. That is ensuring that rent rises remain lower than they otherwise would be.”
However, the proportion of tenants in rent arrears increased over the period from 5.8% to 6.5%.
Mr Fowlis said: “Last week’s No vote may not have eliminated all the questions around Scotland’s future, but as the country moves forward and begins to put the referendum behind us, we can concentrate again on keeping the economic recovery on track and wage momentum moving.
“It is not just enough to get people into work - there is a second battle to be fought on average earnings to help households stay out of the red.”