Soaring rental costs are pricing Scottish families out of private accommodation – and the situation is set to worsen as rents climb higher and benefit cuts kick in.
The cost of renting a private home in Scotland has hit a record high, new figures show, and landlords warn that they’ll continue to rise next year as cost of new legislation is borne by tenants.
The average rent in Scotland reached an all-time high of £672 in the three months to the end of September, according to the quarterly report from Citylets.
While the average property is taking longer to let out than a year ago, demand continues to increase in Scotland’s biggest cities. Aberdeen remains the most expensive place to rent, with the average monthly cost of a two-bed flat – the most popular rented property type – rising 2.4 per cent to £899 over the past year. It took just 20 days on average in the last quarter to let out a two-bed flat in the Granite City, down from 25 days in the same period a year ago.
The average rent for a two-bed flat in the Capital has increased by 1.3 per cent to an average of £729, while in Glasgow the typical two-bed flat now cost £622 a month to rent out.
Dan Cookson, analyst at Citylets, said: “Aberdeen and Edinburgh both continue to be the most expensive places to rent as well as both having the lowest time to let in the country, which is a great sign that the only way is up for these cities.”
The latest figures come in a newly expanded rental report that will be unveiled on National Landlord Day on Tuesday.
The occasion will be marked by an Edinburgh conference, where housing and welfare minister Margaret Burgess will highlight the role of the private rented sector in meeting Scotland’s housing needs. Those needs are increasingly acute, however. Between benefit cuts and rising rents, a growing number of people who don’t qualify for social housing are being squeezed out of the private market.
And the cost of private rented accommodation will climb even higher over the coming months, said John Blackwood, director of the Scottish Association of Landlords: “Ahead of our national conference and reports of rents reaching a new high for Scotland, landlords will be pleased to note that demand for private rented accommodation is on the increase. We expect rents to rise even further in 2013 as we see the full effect of greater legislative pressure put on the sector.”
That pressure comes in the form of the the Scottish Government’s new tenant deposit scheme, which came into force in July and with which all landlords must comply by 13 November.
The financial cost to landlords of meeting the requirements of the new scheme seem certain to be passed onto tenants in the shape of higher rents. Newly clarified restrictions on the upfront fees that letting agents and landlords can charge tenants are set to add to the upward pressure on rental prices.
Cookson said: “This year has seen the rental sector face some significant challenges, with both the introduction of the tenancy deposit scheme as well as the decision to ban all agency fees. It’s too early to see whether these changes will have an impact on our figures, but we will be monitoring it closely going forward.”
But Blackwood is more certain of the repercussions. “This, combined with benefit cuts, will undoubtedly affect those families on low incomes as they struggle to find suitable accommodation in the private rented sector,” he said.