Landlords in Scotland hampered by rent controls have managed to drive annual rent growth faster than anywhere else in the UK.
Rents for new lets in Scottish cities are 15.6% higher in Edinburgh and Dundee and up 13.7% in Glasgow compared with a year ago, according to Zoopla’s rental market report for September, which reports that Scotland (12.7%) has overtaken London (12.4%).
Increases in rents for existing tenancies are capped at 3% a year but as properties become vacant, Scottish landlords can reset the rent to the full market rate. This means landlords are seeking to maximise the rent for new tenancies to cover increased costs and allow for the fact that future rent increases will be capped over the life of the tenancy, says Zoopla.
The Scottish government intends to extend the private sector rent cap for a final time until 31st March and this week, Tenants’ Rights Minister Patrick Harvie (pictured above) assured MSPs that it would “bridge the gap” for tenants once the emergency legislation expires. He said it recognised landlords might want to increase rents all at once following the expiration of the Cost of Living (Tenants Protection) Act and has therefore got the power to put rent adjudication procedures in place to facilitate the transition.
Zoopla’s research also finds that double digit rental growth means rental affordability across the UK is at its worst for over a decade at 28.4%.
Meanwhile, letting agents are frustrated by government policies that are pushing landlords out of the PRS and hammering their stock. The latest Royal Institute of Chartered Surveyors market report highlights immense tenant demand that continues to rise, according to a net balance of 47% of agents, across all regions and countries.