The private rental market in Scotland has shown a sharp rise in July, with average rent prices rising 10% since June, according to new findings from the July 2014 HomeLet Rental Index.
The data also shows that, for the first time this year, private rental prices in all regions of the UK have risen, with an average increase of 4.4% since June.
The HomeLet Rental Index shows that annually the UK private rental market continues to rise. The average UK private home rent rose by 8.3% over the year to July 2014. The average rent in the UK now stands at £900 a month, compared to £825 a year ago.
While in previous months the Greater London market has shown itself as a clear front runner in rent rises, July’s data points to fast rising markets in other parts of the UK. Scotland has seen the biggest increase in rents across the whole of the UK with rents rising 10% from an average of £578 in June to £636 in July.
Rent prices in Scotland over previous months have indicated a falling market, with annual figures showing prices falling 0.5% in May and 3.8% in June, so the 10% rise in July represents a sudden change in the state of the market. July's rise was enough to tip Scotland back into positive territory on an annualised basis, with rents now 1.4% higher than a year ago.
Other regions in the UK showing strong growth this month include Wales, East Anglia and the South West. Year on year, East Anglia and the South West have consistently shown the highest rent price rises in the UK, at 9.4% and 8.1% respectively, alongside Greater London at 9.4%.
Martin Totty, Barbon insurance group chief executive officer, said: “With all eyes on Scotland ahead of the September independence vote, it is interesting to note that in July Scotland has shown the biggest leap in rental prices across the whole of the UK, with a rise in tenant’s incomes too. These are early figures, so it is too early to tell if this represents a sustainable uplift in the Scottish market, but indicates Scotland may be one to watch.
“The private rental sector has seen rental values increasing across the whole of the UK this month, without exception. East Anglia and the South West continue to be very strong markets, with annual figures in these regions showing prices rising year on year as fast as the London market, and standing well ahead of the rest of the UK.”
Kate Faulkner, property analyst at propertychecklists.co.uk, said: “What the HomeLet data suggests is that for tenants who can stay for long periods in their rental properties, they are more likely to be able to keep their rental costs down, while moving often could mean paying higher rents, potentially each time they move.
“Just as with property prices, rentals vary dramatically by region. In some parts of the country, rent rises are below inflation year on year, in line with the sluggish wage growth across much of the UK, while in others we are seeing year on year variations from 3% to just over 9%, suggesting strong growth in the local rental market.”