Surprise fall in the cost of renting for Scots tenants

Rents in Scotland have fallen annually as the pace of house price increases has slowed across the country.

The housing market in Scotland saw a rush of landlords snapping up buy-to-let properties. Picture: Ian Georgeson

The average monthly rent in July was £689, down from £696 the same time last year, although this is well below the UK average of more than £900.

It is a similar picture across the UK, with rents in London falling annually for the first time in nearly six years, according to lettings network Countrywide.

Earlier this year, the housing market in Scotland saw a rush of landlords snapping up buy-to-let properties, ahead of a three-per cent land and buildings transactions tax which came into force on 1 April.

Many of these homes may now be appearing on the rental market, widening the choice for tenants and easing the upward pressure on rents.

Johnny Morris, director of research at Countrywide, said: “The large rise in numbers of homes available to rent has certainly slowed rental growth, even with tenant numbers increasing.

“Stock levels were already running higher than usual due to investors bringing forward purchases in the rush to beat the stamp duty deadline in April. Added to that, uncertainty in the sales market in the run up to, and after the EU Referendum has caused more discretionary sellers to turn to the rental market.

“While rental price growth has slowed, current market dynamics are likely to accelerate the growth of renting. It seems that with more stock and demand from tenants we will see the number of households renting increase in 2016.”

At £1,280 on average, monthly new lets in London were around £7 cheaper in July than a year earlier, Countrywide said. The last time rents in the capital recorded a year-on-year fall was in November 2010, when the average monthly rent in London was relatively cheap compared with now, at £923.

Across Britain, rents rose 1.5 per cent year-on-year, marking the slowest rate of growth since 2012. The average rent across the country in July for a new let was £951.

An increase in the number of homes on the market has meant fewer deals are agreed above asking rents, Countrywide said.

In July 2015, 16 per cent of tenants paid over the asking rent to secure a home compared to 7 per cent in July 2016.

The fall was larger in London with 11 per cent of homes let for more than the asking price, down from 32 per cent.