Scotland’s PRS cools as rent control policy looms

Rent rises in Scotland’s private rented sector (PRS) are beginning to ease as policy measures for rent controls continue to progress through the Scottish Parliament.

The latest report from Scottish lettings portal Citylets, shows the rate of annual growth trending downward in the low single digits for all main cities.

Notably, Glasgow recorded a year-on-year fall of 0.5% in rents.

Rents are beginning to ease

The firm’s managing director, Thomas Ashdown, said: “Rents in Scotland’s PRS are beginning to ease which will be welcome news for tenants.

“However, the investment community awaits hard facts on mooted changes to the Housing Bill that have been suggested will alleviate nerves.

“Expanding the market supply is the natural form of rent control long term and one that does not put extra burden on already overstretched local councils.”

He added: “Once again the Scottish PRS finds itself subject to the opposing forces of free market dynamics and government policy.

“Supply and demand balance seems set to ease if BOE interest rates trend consistently lower as expected impacting on the availability of residential mortgages for both tenants and investors.”

Unattractive region for large-scale housing investment

Despite the SNP-led government’s assurances to avoid deterring investment, concerns persist among commentators who view Scotland as an increasingly unattractive region for large-scale housing investment.

However, the Scottish PRS is currently operating as a free market between tenancies – reminding policymakers that PRS rents can both rise and fall.

The significant reduction in annual rent growth in major markets suggests a turning point has been reached – and rents look set to fall as a result.