16
May
2018

Buy to let nets a £5,500 a year profit in Scotland

Renting out property in Scotland offers some attractive profits, but investors should not expect to make easy money, warns a buy to let lender.

Landlords can turn a profit of £5,500 a year from a typical £176,063 home, according to new research from the lender, Kent Reliance.

But to generate this cash, landlords in Scotland must put down a deposit of £52,819 - 30% of the cost of an average buy to let property worth £176,063.

But the investment return is nearly five times the deposit - an estimated £225,454.

Taking inflation of 1% a year over owning a rental home for 25 years, the net profit after tax and expenses is £137,421 or £5,496 a year.

“Regulatory and taxation changes have altered the market dynamic, reducing its attractiveness to amateur landlords, and increasing the tax bills of many investors,” said Eastgate.

“In spite of rising costs, there are still healthy returns in property for committed investors. Policy change remains a threat and it is essential the role of professional landlords in providing vital housing stock is not undermined.” 

 

 How buy to profits compare around the UK

   

25-year totals

 

 Deposit

Initial rent (Annual) 

Rent

Capital Gain

Costs

Profit

London

£158,225

£19,416

£707,876

£576,878

£779,633

£505,121

East of England

£70,153

£8,844

£322,451

£255,774

£343,955

£234,270

South West

£60,864

£8,245

£300,614

£221,905

£305,416

£217,103

Yorkshire and Humber

£37,712

£7,032

£256,364

£137,494

£213,033

£180,824

North West

£36,883

£7,090

£258,514

£134,472

£211,102

£181,884

Wales

£37,835

£5,112

£186,398

£137,943

£188,218

£136,122

South East

£81,301

£9,964

£363,274

£296,417

£395,925

£263,766

North East

£29,512

£4,389

£160,027

£107,597

£151,618

£116,006

West Midlands

£45,027

£7,260

£264,693

£164,166

£240,186

£188,673

East Midlands

£44,759

£7,588

£276,665

£163,188

£243,617

£196,236

Scotland

£52,819

£8,710

£317,557

£192,574

£284,678

£225,454

UK

£73,908

£10,134

£369,495

£269,464

£373,309

£265,650

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: Kent Reliance

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