Between June and July this year, property rental prices rose by 10 per cent in Scotland, marking a considerable jump when compared to the 4.4 per cent rise in the UK in the same period last year.
The figures, according to the July 2014 HomeLet Rental Index – the biggest monthly survey of private tenants in the UK – reflect the stabilisation of the economy and recovery of wages.
The figures of Scotland’s largest letting agents Your Move, in their Scotland Buy-to-Let Index, support the HomeLet Rental findings and also showed that the average cost of renting a home in Scotland has reached a record high in July, at £534 a month.
The Scottish representative of the Association of Residential Letting Agents (ARLA), said: “The looming independence vote has cast a shadow of uncertainty over the buy-to-let market, but putting that aside, now is a very good time for landlords to consider a property investment.”
Gordon Fowlis, regional managing director of Your Move, believes that the positive Scottish figures are due to the strength of the Scottish economy. He said: “As the employment rate in Scotland overtakes that of the rest of the UK, the country is also moving ahead with improved tenant finances”.
It has been suggested that the high demand for rent and the strength of the market is down to society moving towards a renting-culture as opposed to property ownership. Craig McKinlay, mortgages director at Halifax, believes that, “we may be heading towards the point where the aspiration to own a nice home will be replaced by the aspiration simply to live in one.” Moreover, in a recent Halifax survey, 48 per cent of people agreed that the UK is set to become a nation of renters within the next generation, and one in five 23 to 27 year olds have no desire to own a home.
That being said, for those who do wish to own a home, the rising house prices may also be adding to the increasing tenant demand. The average house price in Scotland is now £162,000, up by 5.9 per cent in the last year, according to the Registers of Scotland – which may be a financial barrier to some people wishing to buy, and force people to have no option other than to continue renting.
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