A new survey of the residential property market has revealed that the number of rental properties in Scotland has fallen even further over the last three months. Coupled with this decrease in supply is an increase in demand which is expected to lead to a sharp rise in costs for tenants.
The survey was carried out by the Royal Institute of Chartered Surveyors Scotland (RICS) and discovered a continued trend of fewer new properties in the letting sector being put on the market between May- July 2018. Participants in the survey reported a fall in new landlord instructions, making this the tenth consecutive quarter this has happened.
In contrast, the demand for rental property continues to remain strong. Given the imbalance, it is anticipated that rents will rise by just under 2% across the UK within the next year. In Scotland rents are expected to rise within the next three months.
Chief Economist at RICS, Simon Rubinsohn said:
“The impact of recent and ongoing tax changes is clearly having a material impact on the buy to let sector as intended.”
“The risk, as we have highlighted previously, is that a reduced pipeline of supply will gradually feed through into higher rents in the absence of either a significant uplift in the build to rent programme or government-funded social housing.”
“At the present time there is little evidence that either is likely to make up the shortfall.”
For property law advice please contact me Alison Gourley on 0141 552 3422 or by email on ajg@mitchells-roberton.co.uk