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News: Scottish landlords bemoan BTL

Wed, 09 May 07

Profits in the Scottish buy-to-let sector are showing signs of decline, with landlords seeing a significant dip in rental yields and lower returns than in any other UK region...

According to reports in the Scotsman, rental yields in the Scottish buy-to-let sector fell from an average of 6.88 per cent in the fourth quarter of 2006 to 5.99 per cent in the first quarter of 2007, signalling a downturn in profitability in the first three months of the year.

Rising house prices have been highlighted as a key factor in declining buy-to-let returns, with investors having to pay more for their properties. This subsequently impacts upon any profit they are able to make in the future.

Looking ahead, anticipated interest rate rises are expected to act as a further constraint upon affordability.

In addition, many fixed rate mortgages are coming to an end, meaning that new investors with buy-to-let mortgages are having to opt for variable rate deals that offer no insulation against base rate rises.

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