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Buy-to-let market’s “stellar” performance means higher rents for Scottish tenants

Tenants will doubtless be less than jubilant, but Scotland’s rental market had a “stellar” performance in March, with rents rising in every region.

The latest Scottish buy-to-let index from Your Move said that increased demand for an insufficient supply of family properties was one of the major drivers of the rental market in March. This was most keenly felt in the Highlands and Islands regions, where rents increased faster than anywhere else between February and March.

Rents in this region grew 0.8% between February and March. This was ahead of the South of Scotland region where rents increased by 0.5% in the same period, the index said. Other highlights of the report include:

  • Both areas have seen prices rise thanks to increased demand for family properties. These three and four bed properties have been particularity in demand in the Dumfries and Highlands areas
  • The South of Scotland region saw rents rise fastest on an annual basis, growing 5.9% in the past 12 months. However, it was a mixed picture for other parts of the country
  • While East of Scotland (2.4%) and Edinburgh and Lothians (2.3%) both saw rents rise compared to March 2016; Glasgow and Clyde (-3%) and Highlands and Islands (-1.9%) experienced falls in rentals, particularly in certain towns, where for various economic reasons they have seen significant drops
  • Across all of Scotland, rents increased by 3.8% in the year to March 2017. Fears that another Scottish independence referendum could destabilise the rental market appear to have been unfounded, although it remains to be seen what the long-term impact will be
  • The most expensive region of Scotland continued to be the Edinburgh and Lothians area. The market in the capital city remains strong due to high demand from tenants, especially given the strong student population. The average rental property here let for £651 in March 2017, with no other area recording rents over the £700 mark. The closest competition came from the Highlands and Islands, where the typical property cost £690 per calendar month
  • At the other end of the scale, the East of Scotland is the cheapest place to rent a property in the country with an average cost of £536 a month
  • Across the whole of Scotland rents rose 3.8% in the past 12 months, the average property is now let for £565 per calendar month

“March saw a stellar performance across Scotland as every single region recorded higher rents than the previous month,” said Brian Moran, lettings director at Your Move Scotland. “Demand is increasing in segments of the market such as family homes, showing there is room for expansion of the rental sector.

“This increased demand is being seen in areas such as the Highlands and Dumfries, suggesting the rental sector is extending beyond the big cities. Yield levels have actually increased this month, bucking the trend seen in the rest of the UK. This shows Scotland remains a great place to invest, as well as a great place to live.”

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