A worrying report suggests that tenant arrears in Scotland are rising, despite letting agents’ fees on tenants being banned.
These types of fees are legal in England and Wales and experts commonly point to these costs as a reason why tenants are struggling financially.
Data from research conducted by Your Move indicates the proportion of rent arrears north of the border rose marginally from 8.8% in May to 9% in June. The growth was more substantial when assessing year-on-year data, with arrears standing at 6.1% in June 2014.
‘It’s become clear over the past year that this isn’t a problem that’s going to fix itself, ‘said Brian Moran, lettings director at Your Move Scotland. ‘Greater supply of homes to let is the only way to definitively address the housing shortage and ease the financial pressure in the market.’
More extensive rental data indicates that Scottish private sector rents have risen to stand 3.1% higher than one year ago. This means that the average rent in the country is £549 per month, with an increase of 0.8% in June alone.
Scotland rent arrears rise
What’s more, rents have reached record highs in traditionally more affordable parts of Scotland, such as the East, South and Highlands.
‘It’s not just the big urban centres of Edinburgh and Glasgow which are coming up against an urgent shortfall of housing-there is furious demand for homes to let the length and breadth of the nation and that is underpinning this build-up in rental prices,’ observed Moran.
Buoyant total annual returns are providing a welcome boost to landlords across Scotland – and represent a nice perk above steady monthly rental income. But most importantly, rental yields are also cruising along on an even keel, and have absorbed some of the recent shockwaves of the new Land and Buildings Transaction Tax, which has disrupted the course of property price growth more recently,’ Mr Moran added.