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TODAY'S OTHER NEWS

Leading agent warns that rent controls will scare off landlords

Scottish rents have fallen month-on-month for the first time since the start of the year - and rent controls may make the situation worse according to a leading letting agent.

Date from lettings agency Your Move shows that average rents in Scotland dropped 0.5 per cent in August, the first monthly fall since January. 

This means the average monthly rent in Scotland has dropped £3 from its summer peak of £549 in July to stand at £546. 

Rent growth has also seen an about-turn on an annual basis. After an acceleration of annual rent rises throughout the first half of 2015, Scottish rents are now just 1.7 per cent higher than a year ago, marking a downturn since July, when the annual change stood at 2.8 per cent.

However, arrears in August soared to 12.2 per cent of all rent due - this is up from 9.6 per cent the previous month and just 6.5 per cent a year ago.

As of August, the average gross yield on a Scottish rental property stands at 4.1 per cent.

Your Move calculates that in absolute terms the average landlord in Scotland has seen a return, before any mortgage payments or maintenance costs, of £6,400 in the year to August 2015. Of this, rental income amounts to £5,900, while capital appreciation on buy-to-let property accounts for £500 in the last year. 

“The supply of available homes to let is also struggling to keep up with demand and there is an urgent need for further buy to let investment in Scotland to ease some of the financial pressure” says Your Move's Brian Moran.

But he warns: “Rent controls and the red tape outlined in the [Scottish Government's] Private Tenancies Bill will end up being more of a hindrance than a help to tenants if landlords are dissuaded from investing in the private rented sector as a result and if competition for available properties mounts.”

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