Annual rent growth is now stronger in Scotland than England and Wales, according to the latest Scotland Buy-to-Let Index from Your Move.
As of October 2014, average residential rents across Scotland are now 2.2% (or £12) higher than 12 months ago, while across England and Wales monthly rents increased just 1.5% on average in the past year. Scottish rents are currently rising faster on an annual basis than across seven other UK regions.
The average rent in Scotland now stands at £537 per month, back in line with the record set in August this year. Rents climbed a moderate 0.3% (equivalent to £1) in the month to October, recovering from a dip during September.
But taking a longer-term view, the rate of growth has cooled. Annual rent rises have eased from a 3.2% increase over the year to October 2013.
Christine Campbell, regional managing director of Your Move, said: “Average rents in Scotland have bounced back to peak level in October, and annually the pace of rent growth is exceeding that experienced across England and Wales. Snags in supply and concerns over potential rent caps are setting the stride in Scotland, but in the longer term, the march of private sector rents is easing back on an annual basis. After years of consistency and incremental adjustments, rent rises quickened rapidly after the changes to lettings legislation made tenancy fees illegal. Instead of facing a one-off payment, tenants saw their monthly rents rise at a much accelerated pace. This market is only just starting to self-correct and steady.
“The introduction of any further lettings controls or restrictions by the Scottish government could further disrupt what was a healthy and extremely gradual rhythm of rent growth – to the detriment of thousands of renters. Complicating legislation would ostracise existing landlords and discourage new investment in the private rented sector, squeezing the supply of homes to let and simply adding to the bottleneck of the current housing shortage.
“The private rented sector is the lifeblood of the economy, allowing workers flexibility and accessibility to the jobs market. Tenant demand needs to be balanced by greater availability of homes to let, to protect against unnaturally bloated rent increases.”