People living in private rented accommodation in Scotland have suffered the biggest rents rise of anywhere outside of London and Northern Ireland over the past year.
Landlords have put up prices by more than 3.6 per cent – higher than the rate of inflation of 2.6 per cent – in the latest survey to the end of last month. The average monthly rent for a Scottish tenant in July 2017 averaged at £630, up from £607 in July of last year.
Nine out of 11 areas outside London saw an increase in rent prices, but Scotland and Northern Ireland experienced the fastest increase.
Northern Ireland’s rent prices are up 5.6 per cent from July 2016 standing at £625 last month. The south east and north east of England were the only two regions to record a decline in private rent prices.
Experts believe that landlords are more comfortable increasing rent prices during the summer months than in spring because the market experiences an increase in demand. Research from the Association of Residential Letting Agents suggests that fewer landlords have acquired new rental properties in recent months meaning there may not be enough to meet demand – a plausible reason for the stark increase in price shown in the latest data.
A similar effect has been seen in the housing market where weaker prices stabilised in July because fewer properties were put up for sale.
HomeLet’s chief executive officer, Martin Totty said: “It’s often been the case in recent times that rents have strengthened over the summer period. It’s a time when renters contemplate moving, demand increases, tenancy terms are set, and when the anniversary of the tenancy often occurs. This year, that ‘seasonal’ factor brings some relief for landlords, who’ve endured a gradual erosion in rent prices over many months.
“At the same stage last year, the south east was the main driver of UK average rents. This time around it’s regions throughout the country leading the strengthening in rents.
“If we exclude the London region, the average UK rent for a private rental property has hit a new high of £769 a month, up 1.6 per cent on this time last year.”
Meanwhile, business and financial advisory firm Grant Thornton said the housebuilding industry is “stronger and more resilient than ever” north of the Border despite Brexit pressure.
It said the sector has bounced back from the financial crash in 2008 which led to widespread job losses and stalled projects.
The company credited consolidation, increased collaboration and a focus on innovation and skills development for helping enable a cautiously optimistic outlook across the industry in the short to mid term.
However, the firm warned of concerns that Brexit could lead to a “slump” in the market and said the Scottish Government could “struggle” to reach its target of achieving 50,000 affordable homes by 2021.
Chris Smith, property and construction expert at Grant Thornton in Scotland, cited the recent £655 million acquisition of Miller Homes as an example of a recent “flurry of activity” in the industry.