Policy

Raising the question of rents

Back in November, the law was clarified around the fees that letting agents and landlords charge to tenants. It is now absolutely clear that all fees including admin fees, reservation fees, fees for credit checks etc, were and remain illegal.

Letting agents across Scotland have largely come into line with the Scottish Government’s clarification over the law regarding fees and stopped charging fees to tenants. However, many have claimed as a result that rents will inevitably rise. In fact, a recent article proposed that rents in the private rented sector had already increased following the ban on charging fees to tenants.  This claim was based on a report produced by Citylets, a letting website which issues figures on rental trends across Scotland based on the rental values of the properties it advertises. The article asserted that ‘rents have risen sharply following the ban on tenants fees’, but looking at the figures this claim simply doesn’t stack up.

First, we are not seeing a significant rise in rents across Scotland. Citylets report a 2.3% increase in rents on average across Scotland, which is in fact lower than the 2.7% rate of inflation over this period.  This shows no 2010 and 2011 which show a 2.2% and 1.9% rise.  So no sharp rise following the legal clarification.

Higher rent increases in Aberdeen (6.3%) and Edinburgh (5.1%) are reported, with Scotland’s biggest city, Glasgow, showing a below average 2.2% increase.  It’s stretching the point to claim a rent increase in two areas of Scotland is directly because of a national clarification.

There is also another more obvious explaination for the higher rises in rents in Aberdeen and Edinburgh. Private housing in these areas is the most expensive in Scotland, and a strong demand for private rented homes follows.  There is always going to be high demand for these properties and the Citylets report itself shows that demand is growing – “The average Aberdeen property now takes less than three weeks to let (18 days) – a reduction of 6 days from the previous year although 1 bed flats take just 9 days which is the shortest figure we have ever seen”.  So the report itself points to a strain in supply.  Based on the Citylets report, it simply cannot be said there is any evidence for a sharp rise in private rented sector rents and the recent clarification of law around charging fees to tenants does not adequately explain any significate price differences.

We will monitor any increases in private rents over the coming months.  Private renting is growing as a proportion of household tenure type (17% in 2010 compared to only 7% in 1999), across Scotland, and it’s likely to continue taking the strain of both the undersupply of social homes and the squeeze on homeownership. Significant rent increases would make it difficult for tenants, especially those on low incomes, to afford to rent privately.

Shelter Scotland has recently launched a campaign ‘Rethink Renting’ – asking for a private rented sector fit for families and fair for all, and we will continue to fight for the rights of tenants in the private rented sector to a secure affordable home.

Use our ‘Reclaim your fees‘ toolkit if you’ve been charged any unlawful fees by your landlord or estate agent.

 

About the author

Zoe McGuire

Zoe McGuire

I am the Policy Assistant at Shelter Scotland and have been part of the team since 2010. I provide general policy and research support to the team specifically assisting the Empty Homes Co-ordinator. When not working on all things policy I can be found cooking, eating and attempting to learn French.

  • How does a charge described as ‘agency cost’ fit into this? Is it reclaimable?

    • Zoe McGuire

      The law now makes it clear that any charge other than
      rent and a refundable deposit is illegal. ‘Agency cost’ sounds like it
      would fall into this category and would be reclaimable

  • The report produced by Citylets is very misleading and the blog sufficiently debunks the main inaccuracies contained within. I think the purpose of the report was more sinister as I do believe that rents will increase this year and this will be at the letting agencies behest. They will undoubtedly try to recoup their lost working capital which has been illegally and unfairly amassed through illegal letting fees and immorally held deposits by attempting to essentially ‘pricefix’ rent increases. This kind of report serves as nothing more than a smokescreen which will be used to smudge the lines of visibility between inflationary rises which are hard to avoid and artificial rises which will be instigated by the agencies. I hope that landlords are aware of any undue pressure by those they employ to increse charges unfairly.