Analysis by Zoopla says rent controls introduced in Scotland have directly led to higher rents.
The property portal’s research team has analysed rents north of the border since September 2022 when the Scottish Parliament introduced rent caps on annual rises to existing tenancies.
“While intended to reduce cost-of-living pressures for renters, it means landlords are now going higher at the start of a tenancy to cover their costs and the limited increases during the contract. This leads to Scotland having the highest level of annual rental inflation in the UK at 11.1 per cent. The average monthly rent in Scotland stands at £790, £82 more than a year ago” explains senior property researcher Izabella Lubowiecka on the Zoopla website.
Although this is a lower rate of rental growth than a year ago, Zoopla says it expects Scotland’s rent rises to outpace the rest of the UK’s throughout 2024.
Major cities including Glasgow and Edinburgh lead the rent rise charge, while rural areas typically record rental growth below six per cent per year.
Meanwhile across the whole UK the portal says the average rent has risen 8.3 per cent in the last year, adding £1,100 to the average annual bill. UK renters are now paying £1,220 per month on average, ranging from £695 in the North East to £2,119 in London.
Zoopla says rental growth slowing to single digits is a sign that peak growth has passed after nearly two years of 10 per cent or higher increases. London is seeing growth slow the most as rents hit an affordability ceiling.
“We expect a further slowdown in rental growth in 2024 as worsening affordability keeps demand in check” writes Lubowiecka.
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A surprise of immense proportions 😂😂 said no landlord ever. 🤷♂️🤷♂️
What a silly Article what did they think would happen of Course it has driven up Rents.
Why has Shelter & Generation Rent campaign for all this, they must hate the Tenants, all the while pretending to be the Tenants best friend.
However it’s not Rent increase for landlords its Regulation costs increase which the Landlords have to recover + its a higher figure than that to my mind as it will be classed as higher rental income and taxed @ 40%.
Seriously. You had to be beyond dim to not see what rent caps would do. ALL government tinkering in the PRS makes it worse for Landlords which makes it worse for renters.
But government doesn't learn; they double down instead! 🤦♀️
Yep- I can hear Cilla- Surprise Surprise.
I would have been nice if they was carrying out this research to ask the landlords about the reasons why, rent control would be one, why not ask any other reasons and I am sure removal of S21 would also come up.
Rent caps promote two things. 1/ very significant rent increases on renewal of any AST . 2/ exit of landlords from the sector. Neither is helping hard pressed tenants.
Long term as can be seen in Ireland, it destroys housing viability across the board.
Scotland needs to bin the SNP.
Also tenants will be reluctant to move due to the jump in rents, so restricting tenants moving for better employment or other reasons.
so when I relet to a new tenant I will have to consider that as I will not be able to increase that rent throughout that tenancy the start rent will have to be high enough to cover
My lettings agent has a guaranteed rent program which I have most of mine with. I have told them that all agreements must be with annual increases. A number of my properties have had tenants over 5 years and one for over 15 years, never increased the rent.
Now unfortunately they are getting notices of rent increases and annual ones to follow, I will lose a few of them but they will then go straight to market rate and annual increases anyway.
I am also now doing annual increases in rent. Had one tenant for 7 years on the same rent.
That's a shocker. Who'd have thought.
Rent increases benefits the LL and the tenant in the long run. Not increasing rent on a regular basis so it becomes below market creates massive problems eventually
Jahan, well not sure about that puts pressure on Tenants more coming & going. Also when it pushes you into a higher tax brackets and loose your personal allowance.
Houses as you know need constant repair more so when it is a tenanted property. Not being able to afford the repairs because rent was low in the past is quickly forgotten about when the tenant gets No Win No Fee offer from a lawyer. As for S24 George Osbourne vindictive tax that unfortunately is the ridiculous issue that we now have to manage. A big reason why I’m selling
Anyway landlords are doing exactly what Government wants putting up Rents or exiting all together, for the Big New Boys their friends in high places and The Developers to take over our Business, no HMO’s license required. No Section 24 for them , & for most part will be able to retain AST, with their high rise death trap boxes in the Sky, we are back to Cladding again look around you and their 3m2 of balcony recreational space, for storage/ drying clothes, they can always jump off.
Yes definitely being set up for the corporates to take over. Now all the Conservative policies make sense. I always suspected that was the long game and it is the tenants who ultimately lose out.
Backfired Rent controls are the beginning. Not as onerous as what is in the pipeline when they abolish S21 and bring in the RRB. Worse is yet to come, you ain't seen nothing. U-turn would be 10 years too late. Most LL's are aging ones in their 50's and 60's or even older, who have quietly started to leave the market. The government will get their corporate renting fabricated flats in huge buildings with EPC B' and C's. However, this will be at a huge costs to the tenants and social housing will have no place, unless government purchase properties, maintain and administer the properties on a persistent basis. Let's see how they cope, probably outsource the function at a huge costs to all who need to benefit from housing. Totally u insightful fools!!!
It will be a decade or more before the BTR sector gets anywhere near sufficient ‘unaffordable new slum housing’ into place.
In the mean time, where are tenants going to be housed? Not in a diminishing PRS, not in a static and stuck social housing sector and not by any councils who don’t have more than a handful properties anyway.
when one puts in a rent control this is self defeating as then Landlords have the excuse to put up rents to the max of the rent control allowance every year, when before a lot of landlords did not increase rents until a new tenant came along or after 4 years, iv had tenants in for 5 years without rent increases. so with a rent control I would actually be making more rent
You wonder why this comes as a shock, you blow a hole in the finances of Landlords, guess what they take their money elsewhere. Unlike tax hikes on Booze & Fags, the alternative isn't corner shop knock offs but a tent in the bushes when the Council are flooded with the homeless.
It's actually a lot worse for tenants than described in the article.
Due to the risks and the time it takes to evict, landlords (us) are taking larger deposits. In the past I was always happy with one months rent as a deposit, now I take the maximum I can take (2 months).
These fools really have screwed over tenants, the best laugh is this, they are still trying to screw them over more, as every policy is ill thought out, will drive folk away and due to the lack of supply will increase rents
The maximum deposit is five weeks, not two months.
AL
It's still 2 months in the Peoples' Republic of Scotland.
In Scotland on a PRT (Private residential tenancy) it is a maximum of 2 months deposit
For some reason (annoyed Landlord) it won't let me respond to your post
Apologies and thanks, Robert and Graham. I would have expected the People's Republic of Useless Hamas to be stricter than England.
It usually is!
As predicted, the SNP/Green "war on Landlords" has just ended up pushing up market rents even faster, thus hurting the tenants, whom they claim to protect, and who are daft enough to believe them and vote for them.
The new proposals, where a tenant doesn't agree to any increase, allow rents to go up by between 6% and 12% to match current market rents - whatever they are given the vast differential in quality even within the same street or block.
However, where the tenant DOES agree, there doesn't seem to be ANY cap on what the rent increase might be - and if the alternative is that the property is put up for sale, it's highly likely the tenant will "agree" given the difficulty in trying to find an equivalent deal when faced with the acute shortage in rental properties caused by the same SNP/Green "Government".
As predicted, ALL our tenants will now face ANNUAL rent increases to match current market rents, and since most Scottish Landlords will probably now do the same, market rents will continue to rise and tenants will continue to feel the pain.
Up to now I have tended to leave rents unchanged during tenancies and then, every 3 or 4 years, market the property at the new going rate. I calculate that this change in policy will give me regular annual increases of over £20k per annum (around 7 to 8%). If I (wrongly) assumed every property got new tenants at the same time after 3 to 4 years, then over that period, my increases would previously have been zero but this change in policy will now let me bank an additional £80 to £100k before tax or £40 to £50k after tax. Before the tenants would have held on to this £80 to £100k themselves.
I now win, HMRC now wins - only the tenant now loses!
Annoyed, Not making an issue out of it but 5 weeks Deposit was part of the 2019 Tenancy Fees Act.
However from the 1st of April 2023 that was reduced to one month Deposits for new Tenancies. Cheers
TDS and DPS websites both say five weeks deposit if the annual rent is below £50,000 so I am confused by your claim.
Ah sure it’s all wonderful Michael Gove has now given everyone permission to convert Commercial Buildings & Shops to Residential that will put some pressure on us. I don’t believe for one second there’s the Shortage they would have us believe, its the Regulations that’s keeping Property under used or Vacant, call off the hounds.
Now everyone with vacant Shops & Commercial Buildings can start straight away, it’s a tick box process as long as you can tick the boxes, make the Application the Council can’t refuse you. Its a far cry from when every Application I was making was been refused and Appeals costing me tens of thousands of £’s.
Now its fine looking after the Big Boys with loads of Commercial buildings and Offices vacant, because of Computerisation. The Council’s can’t refuse the tick box procedure and they can go ahead. Cripple us and rub butter on them, Cheer’s
Annoyed landlord, What I said is Correct and Tenancy Deposits - DPS are wrong.
The government website agrees with me, so please quote your source.
Having first dealt with rent controlled property over 40 years ago, I could have told you this would end up increasing rents and reducing supply. But why would a politician ask us professionals for an opinion?
We are being systematically replaced full scale attack on private landlords, hundreds of thousands driven out the front door, now here they come in the back door, the Commercial buildings, Offices & Shops etc no planning permission tick the boxes and start straight away no waiting for months to consider the Application to conveniently fill the void created. In the Nick of time before the Election just in case.
Housing rights . Org uk
Government website unfortunately the link is not permitted in the comments section.
They blocked me given you the link.
gov DOT uk/government/collections/tenant-fees-act
Even the Shelter website says five weeks and I am certain that if it had been reduced to four, they would have changed that.
We must agree to disagree.
I think it is four weeks now in Northern Ireland
It don’t really matter. Cos getting it bck from the third party even agent has said . I had a case all ticks in boxes but bins still went bck to tenant. - so it’s a Ni on impossible. All stacked in tenants favour.
Well done dimwit do-gooders who claim to do good for some and end screwing up the ENTIRE TASK. OH SORRY, I FORGOT THAT YOU GET YOUR JOB S BECAUSE YOU ARE SO INCOMPETENT?? AND A GOVT UNWILLING AND CASHLESS TO BUILD MORE HOUSES, BECAUSE THEY WANT TO LOOK AFTER THEIR FRIENDS IN WEALTHY PLACES TO PROTECT THEIR SELFISH BENEFITS
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