Three positive things landlords should be aware of in 2024
With 2024 in full swing, the Scottish rental market is looking particularly lucrative for landlords.
Whether you’re looking to enter the buy-to-let market for the first time or you’re a seasoned investor, now is an exciting time for landlords. Let’s look at three reasons why this is the case.
Rents have increased
According to an official publication from Rent Service Scotland, rental prices increased significantly last year. The average rent increases in Scotland during the 12 months leading up to September 2023 are as follows:
11.7% for 1-bedroom properties, reaching £648 per month*
14.3% for 2-bedroom properties, reaching £841 per month*
13.3% for 3-bedroom properties, reaching £1,026 per month*
13.4% for 4-bedroom properties, reaching £1,656 per month*
These are very positive figures for landlords, as they will see their rental income grow, therefore giving them a greater return on investment. This money can then be re-invested to either purchase further buy-to-let properties, which will further increase their rental income, or to upgrade their existing properties, which could lead to an increase in market value.
Demand is high
Another reason landlords should be optimistic this year is that demand for rental properties is continuing to grow. Zoopla’s most recent study discovered a 10% increase in demand for rental properties over a 12-month period.**
There are several reasons for this, including the fact that renting a home is easier for young people than accessing the property ladder. The fact that 46% of students in Scotland rely on the PRS sector for accommodation is a huge benefit to landlords because it significantly increases demand, lowering the risk of a decrease in rental income due to vacant properties.***
The supply of properties is set to continue increasing
The number of Private Rented Sector (PRS) households has grown significantly since the turn of the century, with the latest Scottish Housing Market Review revealing a 132% increase in PRS properties in that time.**** There are also a further 17,000 Build-To-Rent (BTR) properties scheduled in the near future in Scotland.
The fact that the supply of rental properties is consistently increasing is great news for landlords, as there will be a wider range of buy-to-let properties available to invest in. These purpose-built properties should attract tenants willing to pay slightly higher prices for an improved rental experience. The tenants who rent these properties are likely to be looking for long-term tenancies, which will benefit landlords as vacancy periods should therefore be reduced.
Final thoughts
There are several reasons why landlords are set to benefit from the Scottish rental market in 2024. Rental prices have increased significantly, allowing landlords to earn a higher return on investment, and the demand for rental properties is growing, particularly among young people and students. The supply of rental properties is also increasing, providing landlords with more options for investment and attracting tenants looking for long-term tenancies.
With the help of a reliable estate agent, you can capitalise on the strength of the Scottish rental market and optimise your return on investment in 2024.
Contact us today to expand your property portfolio
Rent Service Scotland*
Zoopla**
National Student Accommodation Strategy 2023***
Scottish Housing Market Review ****
This article was originally published by BriefYourMarket and is reproduced here with their permission.
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