Returns achieved by landlords in Scotland remain highly competitive when compared to other asset classes, the latest figures show.

The average monthly rent in Scotland hit £574 in September – broadly in line with the figures achieved in August and the same month last year, data from Your Move Scotland reveals.

Four of the five Scottish regions saw rent hikes in the year to September, led by growth in the Highlands & Islands where prices are 5.6% higher year-on-year, hitting an average of £610 a month, which is significantly higher than the £576 recorded in September 2016.

The next strongest growth was seen in Edinburgh & Lothians, where rents have increased by 4.5% in the last 12 months to reach an average of £669 a month in September, which is higher than any other part of Scotland.

Glasgow & Clyde was the only region to see a year-on-year price decline, with average rents in September hitting £541 a month, which is down 6% from the £579 a month recorded in the same month last year.

According to Your Move, landlords in Scotland achieved a 4.8% yield on average on their properties, which although down slightly from 4.9% a month earlier, is a significantly higher return than the majority of rental properties in England and Wales, where the average yield is 4.4%.

Only landlords with properties located in the North East and North West regions of England enjoyed higher yields on average than those in Scotland.

“With four of the five regions of Scotland showing price growth in the last 12 months, things are looking up for Scottish landlords,” said Brian Moran, lettings director at Your Move Scotland.

“Returns remain highly competitive and landlords are enjoying greater stability from their tenants,” he added.  

But Moran is urging all landlords in Scotland to prepare for an upcoming change in legislation.

From 31 January 2018 the Letting Agent Code of Practice will come into force and agents will have to declare themselves compliant with this new legislation.

Letting agents will be required to join a Register of Letting Agents and Your Move Scotland is urging all landlords and property investors to enquire with their current agent to ensure they will be compliant with the new rules.

Letting agencies must have submitted an application to join the code of practice by 30 September 2018. From that point it will be a criminal offence to conduct letting agency work if you are not on the register.

Those breaking the rules, which is intended to increase professionalism in the sector and make sure that agents are properly able to handle money received from both tenants and landlords, could face a fine of up to £50,000 and up to six months imprisonment.

“The upcoming introduction of the Letting Agent Code of Practice means landlords should ensure their agent is ready for the changes,” he said.