Prices remain competitive in Scotland compared to the rest of the UK and the rental sector in Scotland continues to show signs of growth at a time of low interest rates and volatile stock markets.
The latest Registers of Scotland monthly house price statistics publication shows that the average price of residential property in Scotland rose by 2.6% in April 2017 compared to last year. This increase could spell good news for landlords seeking capital appreciation on their investment. With rents remaining high Galbraith believe now is an optimum time for buy-to-let investors to consider the Scottish private rental market.
Galbraith has experienced an 11% increase in tenant demand for rental property over the previous quarter (January March 2017) compared to the same quarter in 2016. The firm has also brought 28% more properties to the rental market throughout the last three months compared to the previous quarter.
The number of applicants registering to let a property through Galbraith was up 79% from January to March this year in comparison to the previous three months and the firm also witnessed a surge in viewings from interested tenants, with agents conducting twice as many rental viewings over the same period. The firm-wide average rental achieved was 658 per calendar month, 15% higher than the national average.
Bob Cherry, head of lettings and partner at Galbraith believes the rental market is still an attractive investment alternative with yield levels remaining strong at around 4-5%, he said:
Both UK and foreign investors are looking at property opportunities outside of the over inflated property markets of London as well as other prosperous cities south of the border, and Scotland is an attractive option due to the affordability aspect combined with the level of demand from across all rental segments including families, professionals and retiree couples.
Landlords have been impacted by a range of legislative changes over the past couple of years, not least the introduction of a 3% tax on buy-to-let properties and the new tenancy act passed last year. However, rents are continuing to perform well with improvements in tenant finances meaning fewer incidences of late or non-payment of rent therefore we have experienced a 50% drop in rent arrears over the past 12 months.
Market conditions including landlord supply and tenant demand, determine rental prices and this must be carefully considered but with property prices in Scotland currently on the up, I believe the buy-to-let property market is proving a viable investment option for those looking to invest in bricks and mortar, as well as offering exciting potential for landlords wishing to grow their portfolio.
Currently for sale through Galbraith and offering sound investment opportunities include:
11 Tweed House in Kelso is a tremendous penthouse apartment which provides bright, well- appointed and beautifully presented accommodation. The flat could provide a buy-to-let landlord purchaser with a 4.5% gross yield per annum.
10 Buchanan Stables in Drymen is one of ten flats within an early 19th century two-storey classical quadrangle of stone construction under a pitched slate roof with a cobbled courtyard. The building originally functioned as stables, coach house and offices. 10 Buchanan Stables could provide a buy-to-let landlord purchaser with a 4.8% gross yield per annum.