Buy to let rents in Scotland jumped by 0.6% in the year to May 2018, according to official figures.
The annual rent increase in Scotland lagged those in England, where they were up 1%, and Wales, which saw a boost of 1.2%. But despite the muted rent performance, Scotland’s buy to let market outperformed the rest of the UK.
The rent figures came from the latest Office of National Statistics Index of Private Housing Rental Prices, which looks at what tenants pay across Great Britain. The increase equates to a £3 a month rise for a tenant paying rent of £500 in May 2017.
“Growth in private rental prices paid by tenants in Great Britain has slowed since the end of 2015,” said the ONS report. “This slowdown in the growth in private rental prices in Great Britain is driven mainly by a slowdown in London over the same period.”
A separate report from OneSavings Bank, which lends to landlords under various brands, says the value of the buy to let market in Scotland was up £11.9% by £8.1 billion to £76 billion in a year while the rest of Britain was experiencing a slow-down. The growing buy to let sector in Scotland was mainly pushed on by increasing house prices, which rose by around 7.6% in a year. Yields of 5.3% outperformed the rest of the UK, which averaged 4.4%.
Two out of three Scottish landlords point to rents having increased during the past year, while 36% cited rising tenant demand as the main factor pushing up prices.
The report estimates that Scottish landlords were paid £4 billion in rent during the past year. OneSavings Bank chief Andy Golding argued that the government needs a thriving private rental sector.
“Political opinion may be set against the private rental sector, but without it, the housing crisis would be deeper still," he said."First-time buyer numbers are a long way from pre-recession levels and with household numbers growing, and new housing starts inadequate, it is the private rental sector that will pick up the slack. Policy should recognise that.”