Buy-to-let gaining in popularity

The last few days have seen quite a number of stories related to lettings and buy-to-let finance being published. Some of those are especially interesting to those considering property investments in Edinburgh: while the Association of Residential Letting Agents reports a decline in demand for rental property, we’ve seen evidence that the opposite is the case and are still enjoying over 99% occupancy rates throughout the year.

Mortgage providers are starting to see an increase in buy-to-let investments, suggesting that overall confidence is growing. Where Edinburgh is concerned, we have seen the city continuously outperform UK averages where rental yields are concerned. The city’s secret? Its universities are attracting larger numbers of students each year, but as always with property it’s choosing the right flat in the right location to ensure maximum returns.

Going up or going down?

Is there a negative trend for rents achieved by private property in Edinburgh? Some property managers seem to feel the pressure of more property becoming available and rents not continuously growing anymore.

In our experience, rents in the capital are stable or growing, depending on the type of property on offer. On average, our larger (3 bedrooms and more) properties achieved a 3% growth in rent while one and 2 bedroom properties stayed at the same rate or showed a smaller increase.

Watch this space for Citylets’ quarterly figures which are due out shortly….

Making property a long(er)-term game

The Scottish government is today embarking on a review of the private lettings market with a view to creating a more long-term culture, both for tenancies and for property investors and landlords. Germany has been cited as an example. Over the next few weeks, property managers such as Cullen will be consulted and we look forward to contributing our views and sharing our experience to help the process.

Click here for more information and follow our blog for regular updates.

First Scottish presence at Property Investor Show

The Cullen Property team is off to London later this month for the Property Investor Show. We'll be the only independent Scottish exhibitor at the show at London's ExCeL centre on 19 and 20 April. If you're in town and have any questions, please join us at stand 82. You can also make an appointment in advance by phoning the team on 0131 221 1818 or emailing Operations Director Steve Coyle.

Don’t get caught out with tenants in rent arrears

As a landlord, safeguarding your property investment starts by making sure rent is paid each month. A good letting agent will ensure tenants set up regular payments such as standing orders or ideally direct debits, but in reality the work starts much earlier – by making sure the new tenant(s) can afford the flat.
 
At Cullen Property, we operate some of the industry’s most stringent checking procedures before a tenant signs a lease: 

·        Professionals must earn at least three times their share of the annual rent of the property

·        Students have to provide a UK-based guarantor or pay the equivalent of three months’ rent as a security rent

·        All prospective tenants must provide solid employer and previous landlord references as a minimum and everyone is subject to a credit check

The result? No tenants in arrears, no evictions – and happy landlords.

Whilst across the industry problems with arrears are growing - mostly due to economic circumstances - our managed properties are experiencing continuously high demand from reliable tenants.

'Capital' rental growth for student lets above Scotland and Edinburgh average

Well-placed student properties in Edinburgh are giving investors the edge over buy-to-lets throughout most of the UK and Scotland. 

While there's no question over the growing demand for rental properties in general, both experienced by our team on a daily basis and highlighted by recent Savills research, it's once again about location. And here's where Edinburgh comes up trumps: the city's excellent universities continue to attract higher numbers of applicants each year and the majority of students know exactly where they want to live - in the likes of Marchmont, Bruntsfield and Newington. 

The growing demand has lead to an average increase in rent of 3% over the past year, more than four times the figure noted for Scotland overall by BM Solutions. A more detailed review of the areas popular for investment in student flats highlights that even within the growing private rental market  of Edinburgh, properties in those parts of the city are the top performers.  

For more information, just contact one of our team. 

Latest Update on the Tenancy Deposit Scheme

Keeping up to speed with the new TDS (Tenancy Deposit Scheme) Regulations and how landlords and agents should be preparing, we attended a very informative seminar by Lindsays Solicitors today. The likely launch date for the TDS is 2nd July which doesn't leave much time for landlords to ensure their policies, leases and tenancy processes and procedures are sufficiently robust to avoid being caught out - and the penalty could be up to £50k.

To quantify this, all deposits will have to be paid into a scheme and the scheme will ask for the landlords registration number at the point of entering the tenants information. The TDS scheme operators are duty bound to report the Landlords who answer ‘no’ to the ‘are you registered’ question and the maximum fine for not being registered is £50k.

More likely is that the tenant would sue the landlord if the  deposit was not put into the scheme and Sheriffs can award up to ‘3x deposit amount’ payable by the landlord to the tenant in such cases.

Lindsays have provided excellent advice and guidance on the subject of TDS as well as some other advice on recent regulation changes.