Boom for landlords – rental property prices in Scotland continue to rise

Due to a combination of key factors, there has been an upsurge in activity in the rental market across Scotland.

Although finance experts forecast that the UK is on the brink of a recession and the cost-of-living crisis will alter housing market trends, the rental market remains resilient.

Landlords currently on the property ladder in this part of the UK have already benefited from high demand and rising prices.

Here at Letting Solutions, West Lothian’s first dedicated lettings agency, we analyse the latest figures about the property market in Scotland to reveal why the rise in rental property prices is great news for landlords.

House price and rental income growth

The Office of National Statistics reveals that house prices in Scotland have risen by 11.2%, making the average house price total in the country £188,000.

From the start of the year up to May, detached properties have received the highest gains. In this short timeframe, these highly sought-after properties have risen by 13.6% to £332,000. Argyll and Bute saw the highest levels of growth where prices increased by 18.7% from the start of the year to May 2022.

This is exciting news for landlords who purchased their properties below the current market value and are looking to sell their property now, in the near future or further down the line. These high figures prove that substantial profits can be made through property investments.

Private rental prices have also benefited from the impressive market conditions in Scotland. The Scotsman report that in the 12 months leading up to June, private rents rose by 3.5%.

Reasons for the market uplift in Scotland and upcoming changes

The supply-demand imbalance continues to fuel the rise in rental property prices across Scotland and other parts of the UK. Other factors including the type of property and the location of course determine the overall price, but the supply-demand imbalance is largely driving high property values.

Strong levels of demand and a lack of available stock have caused buyers to compete for properties as they are willing to pay more than the asking price to secure the property of their dreams. This has allowed landlords to put up their prices and benefit from the current market.

The high level of competition is not only great for the landlords hoping to earn more money from their investments, but it also allows landlords to be more selective when it comes to choosing prospective buyers.

The current boom in prices and rents may not last forever, however, as the cost-of-living crisis starts to bite north of the border.

Like the rest of the UK, many households in Scotland are being hit, particularly those that are on a low income, as the price of fuel, energy, and goods have increased exponentially. Meanwhile, the Bank of England claims that inflation could peak at 11% towards the end of the year and.

Nonetheless, as business activity remains high, hybrid working continues and students return to university accommodation for the new term, renting will remain a priority for many across Scotland.

Landlords across Scotland hoping to take advantage of the strong market should focus on meeting the needs of tenants in what is now a very crowded but also valuable marketplace.

Here at Letting Solutions, West Lothian’s first dedicated lettings agency, we can guide you through all aspects of the lettings journey and can help you to get the most from your rental properties as a result.

You can find out more about our current hours of service and our current ways of working here.

Please don’t hesitate to contact us, even if you are not a current client. You can ring us on 01506 496006 where our team are waiting to help. Or you can email us at: rent@letting-solutions.co.uk.