Rent Freeze backfires according to property portal analysis

The rent freeze imposed on the Scottish private rental sector appears to have backfired.

In the first quarter since the freeze was introduced the annual rate of increase for Scottish rents soared to 11.9 per cent according to Citylets.

The lettings portal describes the rise was “unprecedented” and the highest in 16 years of its recording market activity.

Rents in Scotland rose to an all-time average high of £972 in Q4 2022, with properties taking just 16 days to let.

According to the portal the catastrophic Liz Truss mini-budget in September “unravelled over Q4 2022” creating an additional layer on worry for 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” says Gillian Semmler, communications manager at Citylets.

And Adrian Sangster of the Aberdein Considine agency adds: “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.”

A complete rent freeze was imposed in the autumn by the Scottish Government; from April, the current rent freeze will end and private rents can rise by up to 3.0 per cent over a 12 month period. 

Landlords can also apply to Rent Service Scotland to increase rent to partially cover specific costs including increased mortgage interest payments on the property they are letting, an increase in landlords’ insurance or increases in service charges paid as part of a tenancy, subject to an overall limit.  From April it will be 6.0 per cent.

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