In the first quarter since the introduction of legislation to effectively freeze rents for existing tenancies in Scotland, rents for new tenancies north of the border rose by 11.9% on an annualised basis, according to Citylets.
The lettings portal said the rise was “unprecedented” in the 16 years it has been recording market trends in the open market.
Landlords in Scotland are currently prohibited from raising rents until the end of March but it was announced last week that they will have flexibility to raise by 3% from April. Further leeway for landlords to raise by up to 6% will also be provided for under prescribed grounds.
The new figures show initial rents in Scotland rose to a new all-time average high of £972 in Q4 2022, with properties taking just 16 days to let. Fears for continued double-digit rent rises in most areas, premised on low stocks relative to demand, “look well founded”, Citylets said.
According to the lettings portal’s analysis, the UK mini-budget in September “unravelled over Q4 2022”, spiking mortgage rates sharply to “layer on concern” for many landlords already affected by the rent freeze.
“The timing of these two events was quite extraordinary and may destabilise the viability of their accommodation provisions at a time of chronic supply shortage,” said Gillian Semmler, communications manager at Citylets.
Commenting on the current outlook for the Scottish market, Adrian Sangster of Aberdein Considine said: “The chronic shortage of PRS properties available continues, whilst demand seems to be ever increasing. As a result, rents throughout Scotland continue to increase along with the stress levels of many people desperate to find a home.
“The political football that the Scottish PRS has become was pumped up, kicked around and burst by politicians. It’s now landlords and tenants who are suffering for their failures.”
