Research indicates rents have hit an all time high
Rents in Scotland are at a record high after jumping 1.3 per cent month on month, according to letting agents Your Move.
Tenants paid an average of £549 per month in May, with rents rising across each region.
Your Move’s monthly buy-to-let index suggests the new land and buildings transaction tax (LBTT) has pushed up prices.
Glasgow and Clyde saw the steepest increase, up 1.9 per cent from April to £549 although the region has also experienced the biggest decline in rent on an annual basis, with tenants paying 3.2 per cent or £17 less than the same month last year.
In Edinburgh and the Lothians, rents rose 1.7 per cent, or £11, from April to a record high of £662 per month.
The area has seen rents soar by 11.6 per cent, or £69, since May 2015, powered by the growing proportion of higher-paying jobs compared to the availability of homes.
The smallest monthly upswing was in the Highlands & Islands where rents increased by just £1. With a smaller population and fewer high paying jobs, competition for rental properties in the region has not been as fierce.
The increase in the south of Scotland was also marginal, with only a 0.2 per cent, leaving typical rents to standing at £514 – the lowest average of any region.
Brian Moran, Your Move Scotland lettings director, said: “Rents are rising rapidly as a result of the new land and building transaction tax surcharge for buy-to-let properties. This tax hike has dissuaded landlords from investing in the sector, leading to a shortage of homes to rent, compared to the demand for housing.
“With the limited supply of rental properties, potential tenants have been forced to compete to secure homes, pushing up rents. The introduction of this anti-landlord legislation from Holyrood has ensured the cost of the policy has hit tenants hardest.”
According to the index, the proportion of late rent increased to 12.5 per cent of all rent due in May, compared to 11.6 per cent in April.
Tenant arrears have also deepened on an annual basis, with late rent standing at 8.8 per cent in May last year.
Mr Moran said: “With employment in Scotland falling by 48,000 between February and April, some tenants may be struggling to make ends meet. However, on a positive note our research shows fewer tenants are falling into serious rent arrears, where they are more than two months behind in their rent.”