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Average rents in Scotland fell by 0.2% in September to £536 per month but they climbed to a new peak in Edinburgh, according to the latest buy to let index. Rents fell in four out of the five years and annual growth has now cooled to 2%, the Scotland Buy to Let Index from Your Move also shows. This comes after rents reached a record high in August and the monthly fall is the first for three months and the pace of growth could cool further with the latest LSL Landlord Survey finding that landlords expect rents to rise just 1.8% over the next 12 months. However, talk of tenancy reforms to cap rents seems widely out of touch with reality, according to Gordon Fowlis, regional managing director of Your Move, as rent rises are slowing on an annual basis and retreating back in line with the target rate of inflation. ‘The last time the Scottish government tinkered with lettings legislation, their good intentions didn’t filter down to the thousands of everyday renters on the ground. Indeed, the abolition of one off tenancy fees hoisted rent rises up to an artificial pace after years of stability,’ said Fowlis. ‘Now, adding more strings to the web of legislation encircling landlords may push them to cut loose altogether, as well as stop attracting new buy to let investment. In this way, rent controls will actually accelerate rent rises from the healthy trajectory they are currently on,’ he explained. ‘At a time when the country is facing an acute shortage of housing, and as the government is already increasing the tax burden on many home buyers with their Land and Buildings Transaction Tax (LBTT), putting a cork in supply will only sour tenant finances,’ he added. A breakdown of the figures shows that the biggest month on month drop was recorded in Glasgow and Clyde, with rents falling 0.9% between August and September. In the South rents dropped 0.8%, while rents in both the East and the Highlands and Islands are down 0.1% since August. The only region to experience growth on a monthly basis was Edinburgh and the Lothians. The average rent has risen £9 or 1.5% in the month to September, to reach a new record high of £611 per month. On an annual basis, rents are higher than a year ago across all but one region. Edinburgh and the Lothians have seen the biggest annual change, with average monthly rents increasing by 5% in the year ending September. This is followed by 3.8% annual growth in Glasgow and Clyde, with a £21 uplift taking the average rent to £570 a month. The South is the only region to experience a price fall in the year to September, with average monthly rents dropping 0.1%, As of September the gross yield on a typical rental property in Scotland stands at 4%. This represents a fall of 0.2% since September 2013, when the gross yield… Continue reading →
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