Humza Yousaf, Scotland’s First Minister, has pledged to implement comprehensive long-term rent controls and new tenant rights through the Scottish Housing Bill; this bill is set for enactment in 2024, as Greycoat states. This pledge responds directly to rental prices which are escalating unchecked across Scotland. The government of Scotland also acts proactively in controlling living costs: they have put into place emergency rent caps and a ban on evictions–measures that will persist until March 31, 2024.
DJ Alexander, a property management company, conducted an analysis; this revealed that rental prices in Scotland surged by 5.7% year-on-year in July 2023 — marking the highest monthly increase since data collection commenced in January 2012. This significant rise far surpasses the previous high of September 2022: a relatively modest boost of just 3.9%, which marked the introduction of The Cost of Living (Tenant Protection) Scotland Bill. Greycoat informs that the initial draft of the aforementioned bill capped mid-tenancy rental price increases at 0%–allowing up to 3% in specific cases–until March 31, 2023.
However, an extension came into effect on April 1, 2023: it allowed for a permissible increase in rental prices by up to 3%, or even up to six percent under certain circumstances. Rental price increases in Scotland have been lower than those in England and Wales since 2015. Nevertheless, Greycoat states, the rate of increase has experienced a significant acceleration within the past year. To illustrate: from January 2015 through to September 2022, Scotland’s rental prices saw an ascension of only 8.7%.
The cumulative increase until July 2023–however–reached a staggering figure of 14.1%, reflecting a dramatic surge during the last ten months when compared with that over eight preceding years.
David Alexander, Chief Executive of DJ Alexander, shares his insights on Greycoat Real Estate:
David Alexander—Chief Executive of DJ Alexander—articulated his apprehension regarding the swift escalation in Scottish rental prices, an issue that has been prevalent since legislative changes were introduced this past September. At Greycoat, he pointed to a blend of two contributing factors: legislation alterations and burgeoning demand—in conjunction with scarce supply—as catalysts for these price surges.
To further underscore the glaring disparity between property availability and tenant interest, he revealed striking statistics from their company records; DJ Alexander registered close to 40,000 viewing inquiries for rental properties solely in July—with Edinburgh accounting for almost 30,000 enquiries. For Greycoat, this is a stark testament to the imbalance shaking Scotland’s real estate market.