The name may have changed, but the story in Scotland’s PRS remains very much the same at the end of Q1 2024. Rent controls remain, albeit for within tenancies and not the open market. For now. Emergency legislation for capping rents gave way to temporary legislation to achieve same but with more leeway than before with allowable rises of up to 12% and with the eviction moratorium at an end. Arguably the former necessitated the latter with many tenants finding themselves renting property at rates much lower than the open market. The formula for setting rent rises may see some landlords reaching for their school algebra books.
However for those seeking new lets, conditions improved for many in the first quarter of 2024. The rate of annual growth, having eased last quarter in many key locations falling back to single digits, continued to move downwards in Scotland’s cities with associated Time To Lets (TTLs) significantly lengthened. Should this continue into next quarter we may well see growth figures reminiscent of long term averages after what may transpire to have been post pandemic market distortion aggravated by emergency legislation.
“In Scotland’s dynamic letting market, recent changes to rent cap rules have grabbed attention. While such regulations aim to balance tenant rights and landlord returns, demand continues to surge, eclipsing available supply. Despite this, a silver lining emerges for landlords, with stagnant property prices and escalating rents yielding attractive investment prospects. Amidst this landscape, prudent landlords find themselves in a fortuitous position, as the market’s dynamics offer an opportune moment for acquisition. With rental yields on the rise, the Scottish letting market remains a compelling arena for landlords to navigate, presenting both challenges and promising returns in equal measure.”
I am a Tenant Landlord
