The UK’s housing market may still have a way to go before it recovers completely, but some areas are now starting to see significant improvements.
A new Your Move survey has revealed that Scotland’s property prices have increased year upon year, according to figures from this February, by 3.3%. Property prices on average, are now bringing in £173,862. So, could this mean that Scotland could be a buy to let hotspot?
Rental rises and capital appreciation could benefit buy to let landlords
An impressive 17 out of a total of 18 areas throughout Scotland. You can compare public liability insurance here – https://www.moneysupermarket.
This, along with capital appreciation is tempting many buy to let landlords to invest in Scottish property. It isn’t just the past year which has seen rental rates on the rise in the country. Lothian has experienced a continual rental increase over the past five years, totalling a huge 23.5% overall rise.
Not all parts of Scotland are potential buy to let hotspots however. Aberdeenshire actually experienced a drop in rent by 13.7% in one year. Dumfries and Galloway also experienced a very small 0.1% rental increase. Landlords are advised to do their research before investing.
Which areas will provide the highest yield?
Although the majority of areas in Scotland have benefitted from rental rises, some are more lucrative than others; especially after the changes to the tax relief which landlords are entitled to on residential properties.
According to a recent 2017 study, the best place for landlords to invest in buy to let property is Edinburgh. Specifically, the EH8 postcode area covering Newington, Canongate and Southside, which has the highest yield of 8.02%.
In contrast, the worst yield according to figures was seen in the DD11 postcode, covering the area above Dundee.
Things to consider
While Scotland’s property market may be a fantastic investment, landlords do need to be aware of the differences in legislation. Buying and maintaining a property in Scotland is a lot different to buying in England. For example, landlords have to follow Scotland-specific legislations, such as carrying out a Legionella risk assessment.
Therefore, before you rush in, it’s vital you research the particulars of buying and renting in Scotland. It’s also worth taking out public liability insurance to help cover you in terms of property maintenance. Many landlords find it more affordable to undertake repairs themselves, but may not consider what would happen if they had inadequate insurance and something goes wrong.
Overall, the buy to let sector has been a little slow in recent years, but with markets now picking up, landlords can benefit by grabbing a bargain. Scotland is one of the main areas to see such impressive rental rises, but other areas worth considering include Liverpool, Newcastle Upon Tyne and Cardiff.