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Backfired! Rent Controls lead to Higher Rents, says Zoopla

Analysis by Zoopla says rent controls introduced in Scotland have directly led to higher rents.

The property portal’s research team has analysed rents north of the border since September 2022 when the Scottish Parliament introduced rent caps on annual rises to existing tenancies. 

“While intended to reduce cost-of-living pressures for renters, it means landlords are now going higher at the start of a tenancy to cover their costs and the limited increases during the contract. This leads to Scotland having the highest level of annual rental inflation in the UK at 11.1 per cent. The average monthly rent in Scotland stands at £790, £82 more than a year ago” explains senior property researcher Izabella Lubowiecka on the Zoopla website.

Although this is a lower rate of rental growth than a year ago, Zoopla says it expects Scotland’s rent rises to outpace the rest of the UK’s throughout 2024.

Major cities including Glasgow and Edinburgh lead the rent rise charge, while rural areas typically record rental growth below six per cent per year.

Meanwhile across the whole UK the portal says the average rent has risen 8.3 per cent in the last year, adding £1,100 to the average annual bill. UK renters are now paying £1,220 per month on average, ranging from £695 in the North East to £2,119 in London.

Zoopla says rental growth slowing to single digits is a sign that peak growth has passed after nearly two years of 10 per cent or higher increases. London is seeing growth slow the most as rents hit an affordability ceiling.

“We expect a further slowdown in rental growth in 2024 as worsening affordability keeps demand in check” writes Lubowiecka.

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