Scottish rents cool as Parliament considers rent controls

Scottish rents cool as Parliament considers rent controls

0:03 AM, 8th May 2024, About 2 months ago 2

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Scotland’s rental market appears to be reaching a turning point as rent growth begins to slow down in major cities like Glasgow, which saw a record 3.5% annual increase.

A report from Citylets highlights that the news coincides with the introduction of a new Housing (Scotland) Bill in the Scottish Parliament that proposes stricter rent controls.

Temporary rent control measures that replaced Scotland’s previous rent cap legislation restricts rent rises to 12% within existing tenancies.

However, the proposed Bill would introduce ‘rent pressure zones’ in areas with excessive rent hikes.

Rents in the Scottish private rented sector

The firm’s managing director, Thomas Ashdown, said: “Rents in the open market of the Scottish private rented sector appear to be easing in many locations suggestive of a market now returning to better balance after what may transpire to be multiple but transitory market distortions set in motion by the pandemic.

“Reported cessation of large-scale projects, poised to add significant new supply of rental homes, would be rather unfortunate especially when it is wholly unclear as to where else they will come from.”

The news from Citylets will be welcomed by tenants but will worry landlords and institutions wanting to supply rented homes in Scotland, the firm says.

It adds that without free rein to operate in an open market, many privately funded developments will not be built at a time when the public housing budget for affordable homes has been reduced.

‘Scotland’s dynamic letting market’

Adrian Sangster, of letting agents Aberdein Considine, said: “In Scotland’s dynamic letting market, recent changes to rent cap rules have grabbed attention.

“While such regulations aim to balance tenant rights and landlord returns, demand continues to surge, eclipsing available supply.

“Despite this, a silver lining emerges for landlords, with stagnant property prices and escalating rents yielding attractive investment prospects.”

He adds: “Amidst this landscape, prudent landlords find themselves in a fortuitous position, as the market’s dynamics offer an opportune moment for acquisition.

“With rental yields on the rise, the Scottish letting market remains a compelling arena for landlords to navigate, presenting both challenges and promising returns in equal measure.”

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Reluctant Landlord

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8:21 AM, 8th May 2024, About 2 months ago

what planet are they on? Who is going to invest when there is no certainty of return because of instability and rent caps, and at the same time a political shift to ensure the LL has major costs and difficulties getting a bad tenant out?

For the average LL with one or two properties this is clearly an issue. Maybe not so for the big boys, as they maybe able to sustain non payers and trashed properties against higher rents charged for others, but that's surely not a sound investment strategy not one that gives confidence in growth?

Either way it will continue to be a difficult market, more so if more tinkering is continued under the new leader....


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13:30 PM, 8th May 2024, About 2 months ago

With the Sword of the rent cap and difficulty in evicting a bad tenant ever hovering near the neck of Landlord’s in Scotland , why would anyone step up to the guillotine that is currently the PRS in Scotland .

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