The average rent in Scotland is now just £6 higher than a year ago. Growth has slowed significantly over the last year from a 3.9% (£20) annual jump in rent seen in 2013.
The only exception to the downward trend being felt across Scotland is Edinburgh & the Lothians with a 2% rise seen in rent growth between December 2013 and December 2014.
Christine Campbell, regional managing director of Your Move, comments: “Annual rent growth has braked sharply over 2014, reducing the speed of rent rises to a sustainable and affordable pace. This is providing some welcome relief to the thousands of renters itching to jump on the housing ladder, who are already faced with enough hurdles to saving a deposit.
Only Edinburgh is moving against the grain, as demand for homes to let keeps on banging at the gates, and fierce competition feeds bolder rent rises than elsewhere across Scotland.
This wider downturn in growth during 2014 marks a return to the natural market rhythm. Scottish rents were holding fast on an even keel throughout 2011 and 2012, until the abolition of tenancy fees in November 2012 sparked a new tide of unnaturally steep rent hikes. This should act as cautionary tale for policymakers considering further constricting changes to lettings legislation. The rental market is thriving by its own hand, and too much undue intervention may poison the current climate of affordability.
Scaring landlords out of the rental market would exacerbate the current housing shortage, and wound thousands of tenants as competition hots up. Buy-to-let investment is a vital remedy for the current housing shortage, and for the health of tenant finances.”
Tenant Finances
Tenant finances across Scotland deteriorated in December, as the financial strain of Christmas took its toll. The proportion of late rent in Scotland rose to 7.2% in December, the highest level since May 2013. On a monthly basis, the proportion of rent in arears has increased 0.6 percentage points from only 6.6% in November. Compared to a year ago, the financial health of Scotland’s tenants has declined too, with levels of late rent up from 6.5% in December 2013.
Christine Campbell comments: “Christmas is a brutal time for bank balances, and rent payments fell by the wayside in December in the clamour of all the additional costs. But while we expect a certain seasonal setback, over the year as a whole, tenant finances have retreated. After some improvements in the summer months, the cycle hasn’t been broken, and we’re back to where we started – with too many Scottish households still mired in financial difficulty and struggling to pay the rent on time.
For many, the financial hangover from the festive season is still ongoing, but record low inflation should be helping money stretch a little bit further day-to-day. Annual rent rises are decelerating, easing the pressure off some household bills, but what’s needed now is wage growth to move into the fast lane. The jobs market has got more people into employment, but static salaries are stalling the long-term financial recovery of thousands of working renters.”
