SCOTTISH RENT RISES ACCELERATE SINCE TENANT FEES BAN
·Annual rent rises accelerate to average 2.3% since ban on tenancy fees, after years of stability
· Average Scottish rent stands at £534 per month in July 2014
·Tenant finances healthier than south of the border, with 15% less rent in arrears in Scotland
·Landlord total returns three times as high as a year ago, climbing to 9.9% a year (or £14,994)
Overview The ban on tenant fees accelerated rent rises, according to the first Scotland Buy-to-Let Index from Your Move.
Before it became illegal to charge tenant fees in Scotland in November 2012, average monthly rents had been stable around £508 for a period of almost two years, showing an average annual change of 0.0%. However in the 21 months since the ban on tenancy fees came into force, the annual increase in Scottish rents averages at 2.3% - much faster than the current rate witnessed in England and Wales.
The average residential rent across Scotland is now 2.7% higher than in July 2013, currently standing at £534 per month. This means that tenants in Scotland are currently paying an extra £26 a month in rent on average than before the legislation was introduced, amounting to £312 across a year. This is substantially more than the typical up-front costs tenants used to pay when setting up their tenancy.
At an average of £534 a month, this is the highest level of rent in Scotland on record – but is still 29% lower than the average monthly rent across England and Wales, which is £753 in July 2014.
Gordon Fowlis, Regional Managing Director of Your Move, estate agency chain, comments:“Tenancy fees were outlawed in Scotland with the well-meaning intention of protecting thousands of households reliant on rental accommodation. But we can see that in reality tenants are starkly out of pocket. They are paying much more over a 12 month tenancy than they would have expected to pay for a single set-up fee, adding to the daily cost of living challenge. Before this policy was implemented rents had been flat, relaxing the burden on household budgets and giving tenants some breathing space to climb back on their feet after the dark days of the recession. Banning fees has heightened the financial strain on tenants, as greater costs are now incurred elsewhere through rents increasing at a faster pace.”
“After the consequences we’ve seen of previous government intervention, the biggest threat to the private rented sector is further unwarranted regulation. As we move into the final furlong before the referendum, all sides need to be careful not to scare landlords off the playing field as private renting is now a key integral solution to fulfilling Scotland’s housing needs. If private Landlords sell up and leave the rental market due to more well-meaning, but clumsy, regulation this could force a housing shortage for renters.”
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