A SIGNIFICANT rent gap is emerging between those already in tenancies and those seeking new accommodation, with estate agents blaming the Scottish Government as landlords raise rents.
The latest quarterly report from leading estate agents Citylets put the average monthly rent in Scotland at £1081 over the period April to June 2023 – an increase of 11.4% compared to the previous year and a 35.5% change in five years.
Citylets said the Scottish Government was partly to blame for the growing gap between the rents of those looking for new accommodation versus those protected by the rent freeze.
The report said the rent freeze was “at least partly responsible” for landlords hiking rents and said the policy had also contributed to the availability of rental accommodation.
An initial rent freeze was announced in September 2022 before being extended until March 31 where it was then replaced by a cap preventing private landlords from increasing the rent my more than 3%, which will not expire until September 30.
Edinburgh and Glasgow were the areas recorded with the highest monthly increase, with rents priced at an average of £1477 and £1141 respectively, according to the data.
In Dundee, rent averaged £891; £871 in West Lothian; £835 in Aberdeen; £768 in South Lanarkshire and £745 in Renfrewshire.
Renfrewshire was the only area assessed which had not witnessed a double digit change compared to the previous year, with a 7.4% increase in average rents from 2022.
The report states the increases underline “what many in the industry feared from the outset that the new legislation would acerbate the supply demand imbalance”.
And tenants’ rights campaigners have said the rent cap has failed those moving between homes while people staying in tenancies are protected from hikes.
Aditi Jehangir, secretary of Living Rent, said: “These rent increases show how the private rented sector is continuing to fail tenants.
“Though the rent cap has been welcome for those in housing, it has failed those who need to move.
“As the rent cap is tied to tenancies and not the property, for those who have had to end a joint tenancy due to a flatmate moving out or for those that have needed to relocate, the rent cap has simply not protected them.
“The average tenant already spends at least a third of their income on rent, any further increase is pushing tenants to the edge.
“Tenants should not be forced to choose between remaining in the communities they love or being able to afford to live.
“The rent cap is set to end in March next year but rent controls will not come into effect until much later.
“This Government needs to act to ensure tenants can challenge any rent increase in the meantime and then act to bring rents down."
We told previously how a loophole in the law means that if one tenant leaves a flat share, the remaining tenants can be forced to end a collective tenancy agreement, exposing them to exorbitant price hikes.
It added: “The rent gap between those already in accommodation and those seeking new properties to rent will now be apparent for many would-be movers looking to move within the sector on a like-for-like basis and will likely acerbate supply choice further.”
Wendy Gallagher, managing director of One Stop Properties, said: “. Landlords are leaving the [private rented sector] citing that punitive anti-letting Government policy has relentlessly undermined the sustainability of letting property in Scotland.
“For the first time, we are finding that some tenants who have been issued notice to leave due to their landlord selling, are finding it extremely difficult to source alternative, reasonably priced accommodation and are unable to leave on their vacation date.”
Other estate agents quoted in the report also rehearsed calls for the Government to move swiftly to build more homes or increase the availability of rented accommodation.
Patrick Harvie, Minister for Tenants' Rights, said: "Our emergency legislation has led the way within the UK at a time when rents have been rising across the UK.
"It applies to most existing tenants and places a cap on in-tenancy rent increases, stabilising rents to help tenants to stay in their homes.
"Since April 1, 2023, private landlords with a tenancy subject to the cap have been able to increase a tenant’s rent in-tenancy by up to 3% or can apply to Rent Service Scotland for approval of an increase of up to 6% in specific circumstances.
"Anywhere else in the UK, private tenants have faced a double whammy of uncapped rent rises both during and between tenancies.
“We agree that the private rented sector has a role to play in helping provide more people with homes.
"That is one reason why we ended no fault evictions in 2016 and further strengthened eviction protection last year, again well ahead of anywhere else in the UK.
"That is also why we consulted on our New Deal for Tenants draft rented sector strategy which sought views on improving accessibility, affordability choices and standards across the whole rented sector in Scotland. "
