0:03 AM, 1st November 2023, About A year ago 5
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Average rents in Scotland for new tenancies have risen by double digits for the fourth consecutive quarter, reaching up to 19% year-on-year growth in some regions, research reveals.
The findings from Citylets point to the Cost of Living (Tenant Protection) (Scotland) Act 2022 which introduced caps on rent increases within tenancies as the reason for rent rises for a new tenancy.
The current legislation, which was introduced as an emergency measure in response to the Covid-19 pandemic, is due to expire on March 31st 2024.
However, the Scottish Government is consulting on a new policy that would expand its rent controls to cover the open market as well.
That comes as the average property to rent in Scotland, having surpassed the £1,000 mark for the first time in Q1 2023, continued to rise to an average £1,115 – an annual growth of 13.7%.
The managing director of Citylets, Thomas Ashdown, said: “It is clear from the latest Government consultation that future policy for Scotland’s private rented sector will likely take the form of the current legislation with a further capping of rents, now including the open market.
“Indeed, many would argue that the current legislation has accelerated and/or shaped the forthcoming regulations.”
He added: “Whilst it is of course understandable that the headline figures for the continued sharp rise in open market rents will be causing unease, it remains a statement of fact that expanding the number of homes in the sector will have the natural cooling effect desired.
“A larger number of available homes will see more people housed at more affordable rents.”
The Citylets report reveals that almost all major regions in Scotland witnessed double digit annual growth in the third quarter of 2023, with Edinburgh and Glasgow seeing 14.9% and 13.8% increases respectively.
The average time to let a property was also significantly reduced, indicating a high demand and a low supply of rental homes.
The Scottish Government has stated that its aim is to ensure that rents are fair and affordable for tenants, and that it will consider the views of all stakeholders before making any decisions on the future of rent regulation.
However, some tenant groups have expressed frustration with the consultation process and called for more radical measures to address the housing crisis.
Karen Turner of Rettie & Co said: “Scotland’s two main cities are still feeling the aftermath of the busy summer months with tenant demand far outstripping supply.
“There remains a huge disparity between supply and demand.
“The impending short let regulations have further hampered this issue across the whole of Scotland.”
She added: “These landlords in the main won’t revert into the PRS as was hoped.
“We urgently require the Scottish Government to do a big U-turn and address the housing crisis over all sectors.
“More encouragement, not barriers for landlords to enter the market whether they are private or institutional.”
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northern landlord
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Sign Up14:42 PM, 1st November 2023, About A year ago
The Scottish Government have dug themselves into a hole and just won’t stop digging. Regulating market rents will just about finish off the PRS in Scotland. Of course “A larger number of available homes will see more people housed at more affordable rents.” What an amazing insight into the problem! Why did nobody come up with it before? Trouble is homes don’t just appear by magic somebody has to build them. Governments/Councils don’t have the money and developers want to make a profit so affordable will go out of the window. Supply will never keep up with demand, Surely England will learn from Scotland’s mistakes? Couldn’t happen in England? Don’t be so sure, desperate times could call for desperate populist measures with scant concern for “greedy” landlords.
LL Minion
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Sign Up15:32 PM, 1st November 2023, About A year ago
so people put up rents (who would not have normally bothered) because of capping proposals. is really a shock that this lifted all rental rates as a result?
The answer?
Capping rents again now in the open market! Genius! It is clearly better than a LL leaves the property completely empty. It will go up in value more than it will achive in comparative rent AND not be stuck with a zero eviction ban too.
LL Minion
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Sign Up15:39 PM, 1st November 2023, About A year ago
Reply to the comment left by northern landlord at 01/11/2023 - 14:42
Reply to Northern LL....“A larger number of available homes will see more people housed at more affordable rents.”
1. Where are these available homes now exactly?
2. Not if the LL's dont bother renting them out in the first place. If the rent is capped most people wouldnt entertain letting at less than a 7 - 10% overall return on this given the current climate.
Let house prices go up even further. Nothing more being built....sell, bank, and walk away...
Crouchender
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Sign Up19:29 PM, 2nd November 2023, About A year ago
Reply to the comment left by LL Minion at 01/11/2023 - 15:39
Now the Scottish judicial review of rent controls has failed. This is a green light for English Labour to bring in rent caps / freezes when they are in power in England next year! STATE control on PRIVATE assets is outrageous.
AMAZONIA STARBUCK
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Sign Up12:17 PM, 4th January 2024, About 12 months ago
As the rent cap finishes on March 31st 2024 can I immediately put my rent up to the current market value of similar properties?
Am I oversimplifying things?