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Rent gap is appearing in Scotland, say letting agents

Fewer homes to let are buoying rents in Scotland - but a gap is opening between rents in the major cities and rural regions.

The data comes from two new rental market surveys. The Royal Institution of Chartered Surveyors (RICS) highlighted that the number of homes available to rent fell again in the second quarter of 2018. Letting agents polled in the sentiment survey also said they received fewer new instructions from landlords to put properties on the market.

At the same time, the agents confirmed a rise in the number of tenants looking to rent a home. The lack of homes to let coupled with increasing demand appears to be bolstering rents. Although rents have moved little during the past 12 months, they have climbed back to their former levels, says letting agent Your Move Scotland.

Two regions reported increases of more than 10% in the year to July - 11.5% in the Highlands and Islands, where the average rent is £674 a month, and 10.3% in Glasgow and Clyde, where tenants are paying an average £600 a month. This compares with an average rent across Scotland of £572 a month. Buy to let returns dropped a little - from 4.9% in July 2017 to a yield of 4.7% in July 2018.

Brian Moran, lettings director of Your Move Scotland, said: “There are still strong variations in rents across the different areas of the nation. Edinburgh and Glasgow continue to post price rises while more rural areas have gained less traction.

“Despite these regional differences, the Scottish rental market continues to offer much higher returns than much of England and Wales.

“Arrears levels have also fallen compared to last month, suggesting a solid equilibrium has been reached which benefits tenants and landlords alike.”