Many news articles have recently discussed how the price of private rented housing has gone up in the capital city of London, however it now seems that the capital of Scotland is also experiencing an increase in rent prices. Many have claimed that the reason why rent has increased in Edinburgh is due to the fact that new legislation has meant that landlords are no longer allowed to pass on letting agents’ fees to their tenants, and so have had to increase their rent prices instead to cover the costs.
The lettings website Citylets has recently published information saying that the average tenant in Edinburgh is now paying £819 a month for accommodation, which has increased by just over five per cent. The only other city in Scotland that has had a higher amount of rent increase is Aberdeen, where prices have risen by over six per cent to around £899 a month, meanwhile Glasgow rent prices have increased by 2.2 per cent to an average of £612 a month.
Citylet’s senior analyst, Dan Cookson said: “Our report for the last quarter of 2012 is significant in that it is the first to cover a period after the changes in the sector in 2012 took hold. Two cities have seen some of the biggest rises in rent – Edinburgh and Aberdeen – and these annual increases are the largest experienced in either city during the last five years. There is a suspicion that the recent banning of agent fees to tenants has had an upward impact on rents. Several agent clients have suggested this to be the case and our data seems to support this view.”
Whilst some landlords may think it is a good idea to increase their rent prices in order to cover agent fees, is could actually lead to a higher amount of rent arrears, meaning that they will have to rely on their rent guarantee insurance if tenants start to struggle. Housing charity Shelter Scotland has warned about the increase in tenants struggling to pay their rent, with director Graeme Brown saying: “With little or no chance of things getting better soon our worry is that even more families will face the human tragedy of homelessness this year… To restore its housing safety net, Scotland needs to build more affordable homes and reverse welfare cuts.”