February 2017 - “Brexit effect” dampens rental demand in Scotland
Regional divide emerges across Scotland
Across all of Scotland, rents increased by 4.9% in the year to February 2017. The typical property in Scotland let for £575 this month, but this headline figure masks divides between the five regions surveyed.
The strongest performance (seasonally adjusted) came in the South of Scotland where prices increased by 4.2% in the last 12 months to hit £560.
While prices in this region still increased, all areas of Scotland have been impacted by the trend for European Union migrants – particularly from Poland – to leave the country and seek employment elsewhere.
This “Brexit effect” has hit demand across all regions surveyed. Its impact has been most keenly felt in the Glasgow and Clyde and Highlands and Islands regions. Prices in Glasgow and the surrounding areas dropped by 3.5% in the year to February 2017 – faster than anywhere else.
The average property in this region now rents for £565 a month, 0.1% lower than a month ago.
A lack of demand was one reason prices fell in the Highlands and Islands region. Here, prices have ticked down 3.3% in the last year and now stand at £586.
Demand in this area has also been affected by the Scottish government’s LIFT Scheme (Low-cost Initiative for First-Time buyers).
This scheme promotes 0% deposit mortgages and has helped more people move from being renters to homeowners. Some of the most popular areas are within Dingwall and surrounding villages – all of which are within easy reach of the major employment centre of Inverness.
The East of Scotland remained the cheapest place to rent in the nation in February. The average property let for £535 a month – 2.3% higher than the same point in 2016.