For the UK as a whole the buy-to-let market has contracted since 2015, but our lettings business has grown by 31.8 per cent year on year, showing the significant number of new landlords entering the market, along with existing landlords expanding their portfolio.
For rural property in particular, returns remain good. The lack of supply drives competition between tenants, exerting an upwards pressure on prices. Landlords have enjoyed a 7.3 percent increase in annual rental income on properties we let in the Scottish Borders, a good example of the health of the sector.
Furthermore, the costs of property maintenance are not rising and mortgage interest rates are at historically low levels. This is of note because 72 per cent of landlords have an outstanding mortgage on property that they let, a much higher figure than might be expected.
Demand from waiting tenants continues to be extremely high. On average there are five tenant applications for every rental property we manage. This enables us to carefully select the best tenant from those who apply, with thorough vetting and credit reference checks.
In addition, the high demand ensures that the marketing period for newly available property is kept to an absolute minimum and void periods between tenants are very low. The average length of tenancy in Scotland is now 2.5 years, providing landlords with additional security.
Since the start of the pandemic, only a handful of our tenants have requested any reduction or grace period in paying their rent, a good indication of the reliability of tenant and the good relationships maintained between tenant and landlord, despite the economic crisis.
In addition to handling compliance issues, we advise our landlords on how to bring their property up to standard for residential letting. Refurbishment of a traditional farm cottage, for example, will result in a better quality of tenant, a longer duration of tenancy and a higher rental fee. Our long experience in residential lets means we will never recommend unnecessary expenditure. We know where improvements should be made to secure the best quality of tenant and to enable a higher level of rent to be charged, but we also understand that some cosmetic changes are simply not worth the expenditure.
We offer a full management service, handling everything from marketing the property, finding tenants, rent collection, compliance with ever-changing legislation and arranging repairs. We are registered with the Royal Institution of Chartered Surveyors and the Association of Residential Letting Agents, providing peace of mind for landlord and tenant alike.
If you would like to discuss letting your property, please call me for an informal chat.