JUNE 22, 2016 | BY A & S Property
Scottish rents reach record high
The average rent paid by private tenants in Scotland hit a record high of £549 per month in May, compared with £538 a month earlier, as landlords try to recoup higher costs as a result of the new Land and Buildings Transaction Tax (LBTT) surcharge.
Rents rose across all of Scotland last month, with Edinburgh & the Lothians seeing the biggest increase of any region, with rents up 12%, or £69 year-on-year, the latest Scotland Buy-to-Let Index from Your Move shows.
On a month-on-month basis, Glasgow & Clyde saw the steepest uplift, with rents in the region rising by 1.9% from April. This amounts to a £11 jump in cash terms, with typical rents increasing from £538 in April, up to £549 in May.
The smallest monthly upswing in rents occurred in the Highlands & Islands, where rents rose by just £1pcm.
In the South of Scotland, the increase in rents was also marginal, with only a 0.2% uptick leaving typical rents to stand at £514 – the lowest average of any region.
With the new LLBT placing upward pressure on rents, the Scottish letting agent network report that rents north of the border increased by an average of 1.3% month-on-month in May – the fastest growth on record.
Brian Moran, lettings director at Your Move Scotland, commented: "Rents are rising rapidly as a result of the new Land and Building Transaction Tax surcharge for buy-to-let properties. This tax hike has dissuaded landlords from investing in the sector leading to a shortage of homes to rent, compared to the demand for housing. With the limited supply of rental properties, potential tenants have been forced to compete to secure homes, pushing up rents. The introduction of this anti-landlord legislation from Holyrood has ensured the cost of the policy has hit tenants hardest."
The research also shows that average rents in Scotland have increased by 7.9%, or £40pcm, from £509 per month in May 2011, since the Scottish National Party gained an overall majority in the Holyrood five years ago.
Moran added: “Since the SNP came to power five years ago, monthly rents have increased by an average of £40. However, the rent control policy in the Scottish government’s private tenancies bill will only treat the symptoms, not the cause of rising rents. By limiting the rent that can be charged on a property, becoming a landlord will become less appealing, limiting investment and forcing many to consider leaving the sector. This will lead to an even greater shortage of homes to rent.
“In addition, without the potential incentive of higher rents, landlords will lack the motivation and finance to improve the quality of their properties. The government needs to look at incentivising landlords to increase the supply of rental properties in Scotland. With more homes available to rent, tenants wouldn’t need to compete for properties and rents would be more affordable.”
Article courtesy of Landlord Today | Sign up for Landlord Today newsletter | Get this news on YOUR site!