Despite the fact that most media attention has been on growing rental prices in London over the course of 2014, annual average rents in Scotland also grew, and they are now 3% higher than in the previous year, with the average monthly rent in Scotland now standing at £605.
This annual increase saw the average monthly rental price rise from £588 in 2013 to £605 in 2014.
So what factors have driven this growth? Well, Aberdeen in particular has experienced an increase (over 10%) over the last two years in rental prices, and this can be attributed to its thriving oil-driven rental sector, which has seen the market for properties grow increasingly competitive. Countrywide, too, the economy is looking positive, with strong employment and an increasingly healthy financial outlook.
Scotland still considerably cheaper
Despite a growth in the average rental price, rents remain £89 below the UK (excluding London) average of £694 per month. This means that Scotland is only the eighth most expensive place to live out of the twelve UK regions we report.
Martin Totty, chief executive of HomeLet, explains: “The growth in the Scottish rental market reflects the strength of the economy north of the border – particularly in oil-rich Aberdeen, which has a thriving rentals sector, but also in other Scottish cities and throughout the country.
“A report published this week shows Scotland now has the highest employment and economic activity rates – and the lowest unemployment rate – of any of the four nations in the UK.”
The impact of the referendum
It seems the September referendum doesn’t seem to be attributed to this increase in rent; average monthly rents have not seen a significant increase in the months after the referendum. With Scotland affirming its commitment to stay with the UK, house prices have begun to recover from the uncertainty which has unsteadied the market’s growth.
Overall, buy-to-let appears to be a robust and lucrative investment in Scotland, with gross yields largely unaffected by the referendum uncertainty. However, it isn’t just landlords that should be optimistic too. With greater investment looming, the number of homes to let should also increase, providing further opportunities to those moving to Scotland for jobs.
All figures from HomeLet’s Rental Index.
Image courtesy of Shutterstock.