As the Scottish Government presses ahead with proposals for rent controls and details of the Private Tenancies Bill are expected to be published this week, average rents in the country have started to head south, according to new figures.

The latest Citylets Quarterly Report shows that rents have fallen from their Q2 2015 peak of £762 per month down to £757. Annual growth has slowed from 5.4 per cent last quarter to 2.9 per cent.

Citylets said the national figures reflect strong competing forces from within the market of sustained growth in Edinburgh and falls in Aberdeen.

Aberdeen, which first recorded negative annual growth last quarter of 3.8 per cent, has fallen further recording annualised falls now down 6.7 per cent on last year with drops across all property sizes. Conversely Edinburgh continues its upward trajectory for the 10th successive quarter recording annual growth of 7.5 per cent, the current going rate for the capital.

Citylets founder Thomas Ashdown said the changing fortunes in Aberdeen may pose questions for the Scottish Government plans for rent controls.

He said: “By the start of 2016, it will be a fact that no rental property type in Aberdeen will have outperformed inflation since the onset of the credit crunch. I would go further to say that rents may even fall to the same levels as 2008/9 which would be a significant drop in real terms.

“It would seem that Aberdeen now represents a clear example of how the Scottish PRS can self regulate. With so much concern in the investor community in relation to rent controls, the Scottish Government must surely want to consider whether the intended benefits outweigh the risks at this time.

“Rent controls are a palliative. Should they be administered if they materially undermine a possible cure of institutional PRS investment in city hotspots? Even those who would rather see no PRS at all must surely recognise the pragmatic need for current adequate supply.”

The average property in Edinburgh now rents for £942 per month. Popular 1 and 2 bed properties have shown the steepest growth at 7.3 per cent and 8.5 per cent respectively.

Glasgow meanwhile is continuing to edge up at 2.2 per cent to £684 per month. The annual rate of growth has slowed down from 4.4 per cent last quarter.

Aberdeen’s downward trend continues for the 3rd successive quarter and is likely to continue throughout 2016. Average rents are now below £1000 for the first time since Q2 2013 at £995.

The Dundee market also enjoyed positive annual growth up 1.2 per cent to average £574 per month and seems insulated against both the steep rises and falls in the markets less than 75 miles to the North or South.