Scottish BTL yields rise by up to 7.6%

Scotland’s rental market remained stable in the second quarter of 2026, with West Lothian leading yields for landlords.

ESPC’s latest Citylets reports average rents are largely unchanged, annual growth has slipped by just 0.2% and properties are taking an average of 29 days to let.

The report found that Edinburgh rents increased by 1% to £1,596 per month, with four-bedroom homes seeing the strongest growth and also letting the fastest at an average of 21 days.

Glasgow’s average rent rose by 1% to £1,211, although tenants are becoming more price-sensitive and well-presented properties are increasingly important in attracting enquiries, ESPC said.

But landlords in West Lothian are seeing the best performance.

The city recorded the strongest overall rental growth of the three areas, with average rents rising 1.5% to £1,058, driven largely by a 7.6% increase for three-bedroom homes.

ESPC said wider economic conditions continue to influence the rental market.

The report said: “Interest rates have remained unchanged during 2026 so far, although there is a possibility of an increase if inflation rises again.

“Higher borrowing costs could put additional pressure on landlords, while the ongoing cost-of-living squeeze is making it increasingly difficult for tenants to save for a deposit and buy their own home.

“As a result, more people may remain in rented accommodation for longer.”

Well-maintained properties at sensible rental prices continue to attract strong tenant interest, the report says.

However, it adds that demand has softened for higher-priced non-HMO properties, particularly those renting for more than £2,500 to £3,000 per month.

The student rental market, meanwhile, appears healthier than last year following concerns about excess supply in 2025, the report says.

Commenting on the report, Karen Turner, of lettings agent Rettie & Co, said: “The Scottish rental market is showing signs of returning to a more balanced position after a period of significant rental growth.

“While increased supply and greater regulatory clarity have helped steady rent levels, tenant demand remains strong across many areas as home ownership continues to be challenging for some due to affordability and mortgage costs.

“We expect rents to continue growing, but at a more sustainable pace than in recent years.

“We are seeing well-presented and maintained properties remaining particularly attractive to tenants, with Edinburgh and Glasgow continuing to demonstrate resilience, strong occupancy levels and long term appeal for landlords and tenants alike.”