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Slowest rent rises for two years

From Property Talk Live on March 26, 2015

Scottish rents are rising at their slowest pace for over two years, according to the latest Scotland Buy-to-Let Index from Your Move, one of Scotland’s largest lettings agent networks.

The average monthly rent in Scotland has risen just 1.1% in the year to February 2015 – representing the smallest annual increase experienced since April 2013.  But despite this slower and more affordable pace of rent growth in Scotland, the financial health of tenants has declined over the same period, and February saw the highest proportion of late rent since December 2012.

The average residential rent across Scotland has increased only £6 in the last year, reaching £537 per month in February. This represents a significant downtrend in annual rent rises, which peaked at 4.3% a year previously in February 2014 (equal to a £21 annual boost in cash terms).

On a monthly basis, Scottish rental prices have climbed a modest 0.2% since January, but this marks the first monthly rent rise witnessed since November 2014, as the market slows down.

Brian Moran, area lettings director at Your Move, comments: “Such an incremental rise in Scottish rents over the past year shows admirable stability in the private rented sector. Despite high demand for homes to let in the face of the current housing shortage, rent inflation in the lettings market has remained remarkably affordable for tenants.

“After cruising along on a pretty even keel until late 2012, we then saw steep rent rises stack up against tenants – as the abolition of tenancy fees in Scotland knocked the market out of kilter.

“The Scottish private rented sector has subsequently been on quite a rollercoaster ride, but rent growth has its feet firmly on the ground once again, and is making steady strides forward.

“But while improvements in the affordability of the lettings market mean that tenants are able to keep up with rent rises, other economic factors are holding them back from making solid financial progress and continuing to drag tenants into the red.”

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Source: Property Talk Live