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Credit crunch boosts Scottish buy-to-let
9 April 2008 10:30
Problems in the mortgage industry have benefited Scotland's buy-to-let sector, according to one property consultancy, as first-time buyers (FTBs) flood onto the rental market.
Bank of England data indicates that 73,000 loans were made to homebuyers in February, down by 16.1 per cent on the recent six-month average, while the National Association of Estate Agents reported a significant drop in FTB activity during that same month.
According to Rettie & Co's lettings manager Diarmid Mackenzie Smith, landlords can now expect rents of upwards of £650 per month for a two-bedroom flat in Edinburgh and yields of three-to-four per cent, as tenants snap up any good properties on offer.
He said that the outcome of the credit crunch for buy-to-let in Scotland was that FTBs were now returning to the rental sector, adding that landlords would welcome this development, which he predicted would encourage further investment on their part.
Figures from Halifax show that house prices in Scotland rose by 13.1 per cent over the course of 2007, compared to an overall national growth rate of just 5.2 per cent, although the average Scottish property cost 26.5 per cent less than the UK average house price.
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