Scotland sees fastest rent growth on record
Scottish rents increased by 1.3% to reach £549 in April – the fastest monthly growth on record, the Scotland Buy-to-Let Index from Your Move has revealed.
Glasgow and Clyde saw the steepest uplift month-on month, with rents increasing by 1.9% in the region.
On 1 April Scotland introduced a 3% surcharge on its Land and Buildings Transaction Tax (Scottish equivalent of stamp duty).
Brian Moran, lettings director at Your Move Scotland, said: “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.”
Annually Edinburgh & the Lothians led the way on rent increases, as they rose by 12% (£69) year-on-year.
Despite subdued rent growth the proportion of tenants late paying rent increased from 11.6% in April to 12.5% in May.
Moran told the Scottish National Party to incentivise landlords if it wants to improve conditions for tenants north of the border.
He was also critical of its rent control policy.
Moran said: “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.”
He added: “With increasing costs of renting and less employment in Scotland, tenants will need additional support from landlords. But the government’s policies are instead turning the screws on landlords; driving a wedge between them and their tenants.
“The government appears to have adopted a strategy of scapegoating landlords, instead of addressing the low wage growth, limited housing supply and state of the Scottish economy.”