Scottish rents 7.4 per cent higher than last year despite monthly dip
Tenants in Scotland have had to meet rent increases that are among the highest in the UK and accelerating at almost twice the countrywide average.
While rents across the country fell 2.7 per cent from an average of £721 in May to £702 in June, new data from the HomeLet Rental Index revealed rents rose by 7.4 per cent from £654 at the same time last year.
Rents agreed on new tenancies across the UK, excluding London, were up 3.5 per cent compared to the same period in 2015.
In the capital, rents were 3.9 per cent higher. This compared with growth of 4.4 per cent and 6.2 per cent respectively in the year to May.
The average rent in the UK, excluding London, is £773 a month. In the capital, this rises to £1,575. Northern Ireland has the cheapest rents, where monthly prices average £612.
The authors of the index said that while landlords are conscious of tenant affordability, demand from potential tenants is strong.
Commenting on the report, Martin Totty, Barbon Insurance Group’s chief executive officer, said: “The June HomeLet Rental Index shows that the rental market remains resilient in the face of the various economic and political headwinds the sector has faced recently. Landlords are continuing to secure rental growth whilst there are some early signs of affordability criteria beginning to bear on the rates of rental price growth.
“The impact of the EU referendum vote will now play out over the months ahead: if, as expected, the result acts as a restraint on the supply of new housing, the gap between demand and supply in the private rental sector will remain marked; all the more so if more people decide to rent while waiting to see what happens to house prices.
“Landlords will be considering their position carefully, particularly in the light of further taxation changes to come next year, which could reduce net yields; with long-term drivers such as net population growth still in place, it is likely that rents will continue to rise, though affordability will continue to be crucial. The recent slowdown in rental growth rates may suggest an affordability ceiling is being approached.”