Citylets: Rents continue to accelerate in Scottish private rented sector
Average rents in Scotland for new tenancies in the private rented sector have risen by double digits for the fifth time in a row since the introduction of the Cost of Living (Tenant Protection) (Scotland) Act 2022.
Lettings portal Citylets, which released the figures, said the increases underline fears within the industry that the legislation to cap part of the market would impact adversely on new rental prices.
The picture within Scotland’s main cities was mixed with the rate of growth in the central belt easing, whilst Aberdeen posted the largest annual increase at almost 10%.
The overall picture for Scotland, however, still saw double-digit Year-on-year (YOY) increase at 12.9% sending average rents to £1097 per month. Edinburgh and Glasgow recorded single-digit rises for the first time in two years at 9.7% and 6.1% respectively.
Citylets MD, Thomas Ashdown, said: “Rents in the open market of the Scottish private rented sector have continued to rise steeply right through to the end of 2023 capping a unique year of sustained, unprecedented rental price inflation. That this occurred during a period of emergency legislation is far from coincidental, however well intent.
“As we enter 2024, the central belt has seen its rate of growth ease which will be welcome news to tenants however all residents in or providing accommodation to the sector await with bated breath what 2024 will bring; a year in which it will be a case of out with the old and in with the new as regards further temporary legislation.”
2024 is destined to be another year of change for the Scottish PRS with the ending of the emergency Cost of Living (Tenant Protection) (Scotland) legislation which put a cap on rent rises within existing tenancies. However, rents will likely remain controlled through new, temporary legislation designed to mitigate sharp increases by landlords where rents may be considerably below open market rent values.
Additionally, proposals for full market rent controls will become clearer in 2024, the impact of which on available supply will be keenly awaited by all stakeholders.
David Alexander of DJ Alexander said: “Demand continued to outstrip supply across all parts of Scotland with Edinburgh and Glasgow experiencing record levels of activity. Rents across Scotland have continued to increase at record levels with the number of tenants per property vastly exceeding supply.
“The rent rises have been exacerbated by the emergency Cost of Living legislation introduced to control prices. Continued uncertainty over the detail of the Scottish Government’s future legislative plans for the private rented sector has made some landlords cautious but many are committed to remaining in the sector while returns are strong.”
Gillian Semmler, PR manager at Citylets, added: “2023 will be remembered as the year of unrelenting rental price appreciation in the Scottish PRS. Whilst unquestionably a degree of self-fulfilling policy, the path towards full market rental control was already in motion. However, these figures will add weight to the cause despite the underlying dynamic being a relative dearth of supply.
“Tenants in the central belt will be encouraged by a slowdown in price appreciation whereas in the oil centric economy of Aberdeen it is landlords who will be happy to see the sustained recovery of the local market.”