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Scots buy-to-let landlords enjoying highest returns

26-Aug-2004

By Frank O’Donnell Consumer Affairs Correspodent

BUY-TO-LET landlords in Scotland are achieving the best returns in the UK on their investment, according to a new report.

Investors are receiving an average 8.02 per cent of the property’s value in rent each year. This compares to yields of 5.99 per cent for England and 6.19 per cent in Northern Ireland over the last year.

A separate report from the Royal Institution of Chartered Surveyors, published yesterday, found that rents are rising at their strongest pace for three years. Rents in Scotland remain among the lowest in the UK, with a one-bedroom flat averaging £300 per month and a four-bedroom detached house £1,500 per month.

Fraser Crichton, of Dove Davies & Partners, said: The increase in the lending rate does not seem to deter potential buy-to-let investors wishing to enter the market. This would appear to be because they are looking more at long-term capital growth, rather than the rental yield.

Scotland is also the only region which has not seen a fall in yields over the past two years, with average yields increasing from 7.27 per cent since the second quarter of 2002, to 8.02 per cent.

In the same period, yields in London have fallen from 7.01 per cent to 5.93 per cent. In England as a whole they have dropped from 7.39 per cent to 5.99 per cent. In Northern Ireland they have fallen from 7.15 per cent to 6.19 per cent.