Average rents in Scotland for new tenancies in the private rented sector have risen by double digits for the third time in a row since the introduction of rent controls.
The new figures from lettings portal Citylets underline what many in the industry feared from the outset that the new legislation - formally called the Cost of Living (Tenant Protection) (Scotland) Act 2022 - would acerbate the supply demand imbalance.
The portal claims that the rent gap between those already in rented accommodation when the legislation was passed and those seeking new properties to rent looks set to continue to grow with the cap for rent rises within pre-existing tenancies to be extended for at least another six months from September.
Almost all major regions in the latest Citylets market report witnessed double digit increases in rents in the second quarter of 2023 with the market moving at frenetic pace across all regions and all property types.
Citylets MD, Thomas Ashdown, says he’s worried: “We are living through unique times for the Scottish Private Rented Sector. Never before have we recorded such steep and sustained annual price appreciation across a single region, never mind across the country as a whole.
“A vicious circle of low supply leading to higher rents for new tenancies and less movement within the sector seems to have been set in motion as the rent gap between open and closed markets grows. Add in anecdotal evidence of landlords leaving and pressures on would-be property buyers and its is clear we have a difficult path ahead in achieving balance.”
And Citylets public relations manager Gillian Semmier adds: “The latest Citylets report makes for stark reading that should be acknowledged at the highest level. Good intentions for one market segment through the new legislation appears to be having severe ramifications on the open market. The outlook for the next quarter and beyond is likely more of the same; low supply relative to demand remains a concern”