The private rented sector north of the border continues to offer good investment opportunities despite existing political uncertainties and recent tax and legislative changes, according Galbraith.
The latest report by the Scottish property consultancy suggests that competitive property prices in Scotland, compared to the rest of the UK, coupled with a buoyant rental sector, at a time of low interest rates and volatile stock markets, makes the buy-to-let market north of the border rather attractive for those currently looking to invest in the sector.
Bob Cherry, head of lettings and partner at Galbraith, believes the rental market is still an attractive investment alternative with yield levels remaining strong at around 4-5%.
Aside from solid rental yields, prospects for capital growth also look rather promising in Scotland, as illustrated by the latest Registers of Scotland monthly house price statistics publication which reveals that the average price of residential property in Scotland increased by 2.6% in April 2017 compared with the same month last year.
With property prices and rents rising, Galbraith believe now is an optimum time for buy-to-let investors to consider the Scottish private rental market.
Galbraith saw an 11% rise in tenant demand for rental property in the first quarter of the year compared to the corresponding quarter last year.
The firm has also recorded a 28% increase in the volume of homes coming on to the private rental market in Q1 2017 compared with the previous quarter.
The number of applicants registering to rent a property through Galbraith was up 79% from January to March this year in comparison to the previous three months and the firm also witnessed a surge in viewings from interested tenants, with agents conducting twice as many rental viewings over the same period.
The company-wide average rental achieved was £658 per calendar month, 15% higher than the national average.
Bob Cherry said: “Both UK and foreign investors are looking at property opportunities outside of the over inflated property markets of London as well as other prosperous cities south of the border, and Scotland is an attractive option due to the affordability aspect combined with the level of demand from across all rental segments including families, professionals and retiree couples.
“Landlords have been impacted by a range of legislative changes over the past couple of years, not least the introduction of a 3% tax on buy-to-let properties and the new tenancy act passed last year. However, rents are continuing to perform well with improvements in tenant finances meaning fewer incidences of late or non-payment of rent therefore we have experienced a 50% drop in rent arrears over the past 12 months.
“Market conditions including landlord supply and tenant demand, determine rental prices and this must be carefully considered but with property prices in Scotland currently on the up, I believe the buy-to-let property market is proving a viable investment option for those looking to invest in bricks and mortar, as well as offering exciting potential for landlords wishing to grow their portfolio.”