One hundred percent of letting agencies in Scotland say they have seen more landlords exiting the market since the country’s government brought in and then recently-extended a rent rise cap and evictions ban.
Agents canvassed by trade organisation Propertymark also reported an increase in landlords serving notice on tenants prior to selling up and that, in addition, landlords are now more inclined to raise rents in between tenancies to cover the additional costs created by new regulation, rising running costs and rising mortgage rates.
Only rent rises in between tenancies are allowed of more than 3%, with those during tenancies capped at that level, measures that were extended until March 2024 last month.
As an example of rising costs, while mortgage rate increases are well documented, the price of inventories has increase from £95 to £175 over the past four years, while electrical and gas safety checks have both increased by 25%.
Propertymark says all this is creating a perfect storm for tenants including less stock and therefore rising rents despite the Scottish Government hoping its temporary rules would keep rent increases to a minimum during the cost-of-living crisis.
A spokesperson says: “Recent Housing Insight reports from Propertymark show that pressure on rents remains with 50% of responding agents reporting rents increasing month-on-month on average at their branch in April 2023, while the number of properties available to rent per member branch remained stubbornly low at nine in May.”
One agent reveals that: “In our experience all our landlords are looking to uplift by the 3%...many wouldn't have other than for the legislation and many of our landlords have not previously raised rent through Covid etc and are now being penalised by the 3% cap.”