Love it or loathe it, as residential rental property increases in value across London and a divide between north and south widens, the same trends appear to befalling Scottish regions.
Extensive research by ‘Citylets’ shows like for like tenant-demand and are riding high with property hotspots, mainly in Aberdeen and Edinburgh. The first quarter of 2011 reveals an increase of 5.7% in Aberdeen, bringing average rents up to a record high of £907 per month. Edinburgh is closely behind the increase with a 3.5% jump in rents, again for the first three months of this year. An average property in Scotland’s capital is now likely to set you back £766 per month, while 2-bedroom accommodation goes for about £694 per month, an increase of 4.5% compared to last year.
Rental voids, or as the Scots would put it TTL (Time to Let) indicated huge variances depending on the properties on offer. 1-bedroom apartments were on average the quickest to let, approximately within 37 days and mainly most properties averaging 42 days. It’s a different story in Glasgow however, which has seen a drop of 1.5% on 2-bedroom properties and now stands at £595 per month.
As with England & Wales, lending restrictions on first time buyers has been cited as the most probable cause for regional rent increase caused by tenant-demand. Reacting to private rented expansion, the Scottish government introduced proposals for a Bill last month named the ‘Private Rented Housing Bill’. Proposed reform within the bill is expected to fortify their landlord registration and if proposals are accepted, landlords will be required to provide tenants with tenancy information packs at the onset of a tenancy.
As a result, rogue landlords will face a £50,000 fine and a five-year ban on letting properties along with an aggressive stance on unethical letting agents taking advantage of the rental market boom and charging tenants extortionate premiums.
Although Scotland has a number of devolved ministerial departments, welfare and benefit reform is still controlled by Westminster and as such are compelled to the same policies and reform. Rent arrears are expected to rise as caps introduced last month on new tenancies and January 2012 for existing tenancies will no doubt affect private landlords.
43% of Buy-to-Let landlords in Scotland have smaller portfolios with an average of 1-3 properties; concerns that arrears accrued due to defaulting tenants caused by the housing benefit caps will be detrimental to both landlords and could well lead to tenant evictions.