Rents in Scotland have hit a record high as demand from renters continues to heavily outweigh supply, fresh data shows.
Rents in Scotland’s largest cities have seen the largest gains, led Glasgow and Edinburgh, which have seen annual growth of 16% and 14% respectfully.
Rents in the Scottish capital remain the most expensive, at an average of £1,214 per calendar month (pcm), while in Glasgow the average is £972pcm, according to the latest quarterly report from Citylets.
Nationally the average monthly rent in Scotland is up 8.5% year-on-year to £896pcm, with the average time to let for properties standing at just 20 days.
More than a third of all properties – 35% – were let within a week, while 77% were let within a month, reflecting the high demand for rental accommodation.
Thomas Ashdown, managing director of Citylets, said: “Letting agents remain concerned about the supply of available properties in the private rental sector, with many landlords continuing to sell up while the market is buoyant – or to avoid the threat of increased regulation and the costs that will bring.
He added: “It’s reassuring to see that cities are coming back to life, however rent rises of this order are likely to prove problematic for many, given the ongoing cost of living crisis. This is not a discretionary purchase – you have got to have somewhere to call home. More choice in the sector and indeed more widely in housing would, of course, help.”
Karen Turner of Rettie & Co wants to see the Scottish government do more to encourage investment in the buy-to-let sector in order to boost the supply of much needed housing.
“We should be encouraging more landlords to enter the sector to meet this demand, not discouraging them,” she said.
Charlie Inness, of Glenham Property, does not expect the shortage of supply to change anytime soon.
“Investors are either exiting the market or are cautious of entering due to the uncertainty created by the Scottish Government’s proposals for increasing regulation and artificial control of the sector,” Inness said.
Lots are indeed leaving the sector due to controls, new regs etc but also many I speak to believe this is top of the market – surely a massive influence on a selling decision.
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In one … Thomas Ashdown, managing director of Citylets, said: “Letting agents remain concerned about the supply of available properties in the private rental sector, with many landlords continuing to sell up while the market is buoyant – or to avoid the threat of increased regulation and the costs that will bring.
How come everyone can see it but governments? Its going to get worse this winter and come the New Year if the fall out on rent affordability, as predicted, materialises then there is likely to be a big jump in possession orders and even more landlords selling up with debts not recovered.
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The obvious result of Shelter and the government’s constant attack on landlords.
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Now I wonder….
What if the government, in their infinite wisdom, actually has a plan.
Firstly, I might suggest that it’s a plan to make their buddies even wealthier than they already are (no real surprise there then).
But what if there’s a “new government initiative” along the lines of “Social Housing Plus+” that goes like this:
1. Landlords must be a limited company or equivalent,
2. The company must sign up to some kind of charter regarding the condition of the property, etcetera,
3. Commencing rents will be 20% below market value as of an arbitrary date and only increase by RPI,
4. The company will get a 20% loan (or perhaps a loan guarantee) from the government on terms equivalent to Help to Buy,
5. There will be a VIP application route if you know someone important enough in government (a la Covid PPE),
6. Reduced tax rates on any profits, subject to criteria that already favour the rich & powerful.
There isn’t a person out there who’s struggling to make ends meet at the moment who would not vote for a party that offered a scheme like that. The reason is that it would help them survive the current problems, even though delivery would be years into the future.
However, any scheme like the above would be a mistake. For example, I’ve met several keyworkers over the years that bought into the idea of Housing Association Shared Ownership only to find that the capital value of their properties did not increase in the same way as similar non-HA properties nearby. They also found that the rent portion of the deal increased exorbitantly with RPI in a way that their salary as a keyworker did not whilst their mortgage payments at least stayed roughly level (give or take). And they found the service charges to be crippling. Shared Ownership in many cases has become a trap.
There are examples of the new rental model already, it’s generally referred to as “Build to Rent” and large investment companies are already making a killing.
We need more housing that starts off affordable and remains affordable. In a free market economy the only way to achieve this is to have more supply than demand.
The people of this country are about to have a miserable time because the way the government runs everything is so close to the knuckle. There is absolutely no wiggle room for disaster, there’s no contingency fund.
Yet once again, because of the complete mismanagement of the housing stock of this country, we will be forced to make even more desperate “knee jerk” bad decisions, rather than future-proof sensible ones.
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