Scottish estate agents are blaming the country’s ban on tenancy fees for a recent rise in rents, indicating that the Labour party may face a similar challenge if it brings in the same rule for the UK after 2015.
Your Move, a large network of Scottish estate agencies, argues today that a 2.7 per cent increase in residential rents over the past year has been driven by the scrapping of tenant fees by Holyrood. If elected next year, the Labour party has proposed to do the same.
“Before this policy was implemented, rents had been flat, relaxing the burden on household budgets and giving tenants some breathing space to climb back on their feet after the dark days of the recession. Banning fees has heightened the financial strain on tenants,” said Gordon Fowlis of Your Move.
The group, which is part of LSL Property Services, argues that the higher rents over the year to July have far outstripped the previous cost of tenancy fees.
The network suggests that the average rent for a home in Scotland has risen by £26 per month, or £312 for a standard 12-month tenancy.
Fowlis added: “After the consequences we’ve seen of previous government intervention, the biggest threat to the private rented sector is further unwarranted regulation.”
Across the country, data released yesterday showed that mortgage approvals fell in July, confounding analysts’ expectations of a rise and muddying the waters over the effect of recent regulatory changes.
The number of house purchase loans approved dipped to 42,800 in July, a decline of 500 from June’s number, according to the British Bankers’ Association (BBA) yesterday.
Lending is still up by 12 per cent on the same period last year, following the resurgence of housing market activity.
But in comparison to January this year, the post-recession peak in lending, the number of approvals has fallen by 14.4 per cent.