The Scottish rental market has experienced a turbulent period, making it more and more challenging for letting agents, landlords, and others in the industry to navigate. Amidst the uncertainty, auctions have emerged as a promising alternative route for those who are looking for solutions for their rental property. With the ability to buy and sell tenanted properties and full portfolios, property auctions offer a unique set of benefits for people in the industry.
What's shaking in the rental market?
Despite the Scottish government’s introduction of the ‘rent cap’, rental rates for new tenants have increased making the national average sit at £1,081 per month. Demand for these rental properties has also surged, with the number of tenants looking to move now 40% higher than in 2019. Despite this, rising interest rates are still making it harder for some landlords to make a profit, and the current eviction ban is still in place. These shifts mean both challenges and opportunities for landlords and letting agents, who need to get creative to stay ahead in this ever-changing game.
What about the auction market?
In parallel to the rental market, the auction market has seen some increases of its own. It has been a strong third quarter of 2023 with 46% more lots offered than the same time period last year. A slower conventional market is encouraging sellers towards a different route, with the offering of a fast, reliable sale gaining auctions more prominence as a preferred method for buying and selling rental properties. Auctions offer a transparent and efficient platform for investors, enabling them to explore a diverse range of properties that suit their specific needs. Plus, the accessibility of online and livestream auctions has further broadened their reach, making property auctions more convenient and inclusive for bidders from different locations. It's shaping up to be a busy end of the year for the auction market!
Tenanted property at auction
One of the key advantages of property auctions for letting agents and landlords is the ability to dive into deals with tenants in-situ. This means you can buy properties with established tenants, providing rental income from day one. For landlords seeking to expand their portfolios, buying tenanted properties at auction creates an opportunity to vary and enhance their passive income streams. Similarly, letting agents can use this to offer promising investments for their clients, fostering stronger relationships in the process.
Buying and selling portfolios
Property auctions aren't just about single units - you can also invest in full portfolios of rental properties in one purchase. Investors seeking to buy a portfolio can head to the auction room to choose from a range of options depending on their investment goals. This approach enables them to create a robust and diverse portfolio within a relatively short timeframe. For landlords looking to streamline their investments or exit the rental market, selling a portfolio at auction can offer an incredibly quick way to do so.
Property auctions have emerged as an effective process for navigating the rental market, offering a range of perks for letting agents, landlords, and others in the property industry whether they are looking to buy or sell. As the rental market continues to evolve, leveraging the potential of property auctions can serve as a crucial asset for staying competitive and adaptable in an increasingly dynamic property market.
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