Letting terms of just days considered as "seismic changes" shake Scots rentals

Posted: 19 Oct 2006 12:05:26 GMT

The Scottish buy-to-let market is experiencing "seismic changes" due to rapidly rising property prices, a leading rental agent has said

The Scottish buy-to-let market is experiencing "seismic changes" due to rapidly rising property prices, a leading rental agent has said.

DJ Alexander, which controls more than 3,000 properties in Edinburgh and Glasgow, said that short-term lets could become the norm.

The trend is due to ballooning property values, which, despite consistently high rental income, mean that rental yields are falling.

"This is the one downside, to landlords, of rising capital values," David Alexander of DJ Alexander told the Herald.

"Rents are historically high but, relatively speaking, they have failed to keep pace with the increase in house prices so overall yields have fallen substantially.

"Currently, the average annual yield from a rental property in Edinburgh is three per cent whereas 15 years ago it would have been 12 per cent ... we cannot ignore the way the market is moving."

Offering letting terms of as short as just a few nights would enable landlords to tap the holiday home and business traveller market, he said.

While these would be significantly cheaper than a hotel to the consumer, they could allow landlords to double their rental yield he claimed.

© Houseladder Ltd