Market is working well, so keep rent caps off the table

The latest PRS statistcs show stabilisation and certainty which benefits both tenants and landlords, writes David J Alexander.

The latest statistics on rents in Scotland provides further evidence that the market has stabilised and is working well. Between June 2025 and May 2026 average rents across Scotland rose by £10 to reach £1,009 which is a 1 per cent increase over the year. This was at a time when the wider inflation rate was 2.91 per cent and was the lowest annual rise for a decade and more than 10 per cent lower than the peak annual increase of 11.7 per cent in August 2023 when rent controls were in place.

This greater market stability has occurred since rent controls were ended on March 31 2025 with annual rent inflation in Scotland falling from 5.7 per cent to 1 per cent.

Over the same period rents in Wales rose by £37 to reach £836 per month, which was an increase of 4.7 per cent, while in England the increase was £48 to achieve £1442 per month – a rise of 3.4 per cent.

There was considerable variation in increases across Scotland, with 14 of the 18 broader rental areas regions recording slowing annual rent inflation. Lothian has the highest average rents at £1,425, although the annual increase was only 1.3 per cent. Greater Glasgow has average rents of £1,272, which was an increase of 3.3 per cent; East Dunbartonshire has average rents of £1,163, which was an increase of 4.6 per cent.

Outside the Central Belt rents are considerably lower but annual inflation is higher. Dumfries and Galloway has average rents of £551, which was an increase of 4.8 per cent, while the Ayrshires average £655, which was up 4.8 per cent. In Dundee and Angus average rents were down 1.3 per cent to £828 while Aberdeen and Aberdeenshire were up 1.3 per cent to £854.

There is little doubt that rapid rent rises due to the imposition of rent caps from September 2022 resulted in considerable instability in the market and caused substantial rent increases. By leaving the market to respond to supply and demand rent rises are now broadly around the inflation level. Without the distorting impact of rent controls, the market has sorted itself out and is producing rent increases in line with supply and demand which is to the benefit of tenants who have lower rent inflation and landlords who prefer consistency and sureness in the market above rollercoaster rises and falls.

Over the last year more homes have become available in the private rented sector (PRS) which has reduced rent inflation, resulting in an annual rate more in line with the historic trend rather than the blip caused by the introduction of rent controls nearly four years ago.

These figures are positive for both landlords and tenants as they show the market in equilibrium operating as it should with prices rising to meet demand and falling back when supply exceeds that. It also provides greater stability for landlords and property investors who can see a market that is calm and relatively predictable, which is welcome. It is to everybody’s benefit that the PRS is left to meet its own level producing a more balanced, steady period of prolonged growth in the coming years. Any proposed re-introduction of rent controls utilising the Housing Act would be completely unjustified given this level of rent inflation.