Average Scottish rent stalls at all-time high of £549

The average rent in Scotland has plateaued, remaining at an all-time record high of £549 a month, according to Your Move's latest Buy-to-Let Index.

The figure hit the peak of £549 in June but showed no monthly change last month, the agency reports.

Scottish rents are now 2.8% higher than a year ago, although this has slowed from 3.1% in the year to June, after a prolonged period of accelerating rent rises in the first half of the year. 

Brian Moran, lettings director at Your Move Scotland, says: “We’ve reached a tipping point in July. Rents in Scotland have been building to a crescendo so far in 2015, and rent rises have been quickening their step. But now we’ve reached a mid-point in the year, the rental market has clearly paused for breath.” 

“Tenants will be relieved for now, but only time will tell whether we’ve reached a fork in the road for the private rented sector, or whether rent growth will start to amp up again as autumn approaches, and the age-old disparity between available homes and those looking to rent rears its head again.”  

Across every region of Scotland, rents are higher than a year ago. In addition to annual rental growth across the board, prices are now at all-time highs in three regions – the East, Highlands & Islands and the South of Scotland. 

The average monthly rent in the Highlands & Islands has increased at the fastest rate over the past year, jumping 5.4% since July 2014 to reach a record £568 per month. 

Compared to a year ago, the East of Scotland has witnessed a strong 3.8% (£19) rise, bringing the average monthly rent to a historic peak of £531.

Rents in the South, while still the cheapest location in Scotland to rent, now stand at £513 per month on average, after a 2.7% (£14) boost year-on-year. 

Average gross yields on Scottish rental properties stand at 4.0% as of July 2015, consistent with the previous month. 

Landlord returns are also showing signs of steadying after some considerable variation as a result of April’s Land and Building Transaction Tax. 

Taking into account property price growth and void periods between tenants, but before any costs such as mortgage repayments or maintenance, the average total annual return on a buy-to-let property in Scotland stands at 6.6% in the twelve months to July 2015. 

This is up from 6.1% the previous month, but represents a reduction from total annual returns of 9.0% a year ago. 

“Total annual returns have returned to a calmer and more steadfast course in July – a nice added extra for Scottish landlords on top of their immediate rental income. Crucially, gross yields are also heading north again, which should rally potential property investors after a few diversions along the way after the change in tax regime,” Moran concludes.