Scottish property rents continue to rise at higher rate after years of low increases
As featured in Scottish Financial News.
Scottish property rents have continued to rise at a higher rate than the rest of Britain after years of low increases according to our analysis of the latest data.
Rents in Scotland rose by 2.9% in the 12 months to April 2022 compared with 2.5% in England; and 1.7% in Wales. In Northern Ireland rents increased by 6.5% over the same period.
Although the Scottish annual rate has been higher than England and Wales each month since July 2021, over the long-term since 2015, rents in England, Northern Ireland and Wales have risen at a higher rate than Scotland.
In the seven years since February 2015 up until April 2022 rents in Northern Ireland have increased by 19.9%; in England 13.5%; in Wales 8.0%; while in Scotland 6.8%.
David Alexander, our Chief Executive Officer, commented: “There is no doubt that demand across all sectors of the housing market in Scotland remains strong. We are continuing to experience much stronger volumes in sales and rentals than has been the case for many years.
“The rental market is extremely buoyant in Scotland with some areas, such as Edinburgh, very lively. However, it is important to remember that although rents are increasing at the moment, they have for many years been rising at a lower rate than our counterparts in other countries of the UK.
“Although a 2.9% annual increase in rents appears to be high this is against a background of inflation which is just under 10% meaning that all price increases actually represent a reduction in real terms.”
He continued: “Highlighting rent rises in isolation misses the point that all goods and services are currently increasing at a higher-than-normal rate and rents are simply no different than any other market. All goods and services, must rise each year by at least inflation just to remain static.
“I think that, due to a number of factors, rents will increase substantially more in the coming year. This is not just because of skyrocketing inflation and the cost-of-living crisis, but to a shortage of stock and growing demand. We are seeing the welcome return of EU nationals to fill jobs, but this places an enormous pressure on the private rented sector which is the biggest supplier of homes to workers from outside the UK.”
David concluded: “I think that landlords who offer all-inclusive rents may have to re-think their position. With utilities already rising at unprecedented levels and forecast to increase again in the Autumn it will be very hard to keep increasing rents to meet these greater costs.
“It is currently more essential than ever that landlords, investors, and agents should take care in explaining the reasons for rent increases whilst tenants, their representative organisations, and politicians must also take a realistic approach and understand the necessity for rising rents. Rental prices must rise to keep up with inflation and such increases are entirely necessary to cover greater costs if the private rental sector is to remain viable.”