Strong outlook for Scottish buy-to-let

Monday, 7 April 2008 12:00 AM

Scotland's buy-to-let sector is thriving with rental yields increasing and void periods on the decline.

A sustained boom in house prices north of the border has ensured many buyers are remaining in rented accommodation - increasing demand and boosting the profits of investors.

According the National Landlords Association (NLA) - which recently opened a division in Scotland to cope with growth in the market - prices also remain lower than saturated markets in the south-east of England and Northern Ireland.

"Basically, from a rental point of view the outlook is excellent," explained David Kendall, NLA regional representative for Scotland.

"Yields are increasing, and rental void's decreasing, which is good news."

However, Scotland has not escaped the ravages of the credit crunch which have been sweeping the UK as a whole.

"Probably the biggest challenge for investors is that it's not as easy to finance buy-to-let now, with the credit crunch - that's a general thing which is certainly happening down in England as well," continued Mr Kendall.

"However, a result of that may be that there will be less new buy-to-lets coming on the market, so investors who are already in the game will do quite well. There won't be as many investors coming in this year, as there have been in previous years."

According to the NLA traditional areas, such as Glasgow, Edinburgh and Aberdeen, remain popular, but the market is beginning to diversify.

"Many of the outlying areas and smaller towns are very busy now, because there's a need from people to rent for a whole variety of reasons - not least because house prices have gone up a bit," said Mr Kendall.

"Not as much as England, but they have been strong, and remain strong even now.

The views of the NLA are supported by those of Scottish rental specialists Rettie & Co, finds the recent market has seen gains for investors.

"With the effects of the so-called 'credit crunch', first-time buyers will now come back into the rental sector which will explain the increase in rental demand and signs of rental increases that have recently been experienced," said Diarmid Mackenzie Smith, lettings manager for Rettie & Co.

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