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Four bedroom properties fare well in latest report by Scottish Government

Tuesday 04 December 2018

The Private Rented Sector in Scotland has more than doubled in size since 1999. The latest Private Rented Sector Statistics released by the Scottish Government show that in the period 2010-2018, four-bedroom properties have fared particularly well, showing a cumulative rental price increase of 33.3% over the eight-year period, and an 11.8% increase within the last year alone.

It's important to note though, that the report, which covers September 2010 to September 2018, pulls data from Rent Service Scotland and the majority of the data is based on advertised rents, not rents achieved. Figures given in the report should also be seen in the context of the wider economy, most notably against the backdrop of the cumulative increase in the UK Consumer Price Index which was 18.7% over the same period. 

It's well known that when taken as a whole, two-bedroom properties are the most common for rent; representing over 50% of Scotland's stock is two-bedroom properties. They are therefore used as the benchmark property type for much of the report. 

Of course, the findings can be somewhat skewed by regions with exceptional regional uniqueness which buck the trend, such as Aberdeen and Shire which has seen a downturn in rental prices due to the downturn in the oil industry.

Below are just some of the highlights from the report, which you can view in full below.  

The long period: 2010-2018

Rental prices for two-bedroom properties in the Highland and Islands, Great Glasgow and Fife all out-performed other regions with increases of more than 15%. It was only Ayrshire that recorded an increase of less than 5% in average (mean) rents. 

Average rents for one-bedroom properties in Lothian increased by 39.8%, with rents in Greater Glasgow area also showing a significant increase of 30.9% - both far in excess of the UK Consumer Price Index increase of 18.7% over the same period. Only the Ayrshires and Aberdeen and Shire saw rents fall between 2010 and 2018. 

Average rents for three-bedroom properties in seven out of the 18 areas, outperformed the UK Consumer Price Index, showing rental increases of between 19% (Aberdeen and Shire) to 46.6% (Lothian). 

Over the eight-year period, average rents for four-bedroom properties in 13 out of 18 areas have risen faster than the CPI over the same period (18.7%). Renters in Lothian can expect to pay 46.7% more in 2018 than back in 2010. Argyll and Bute meanwhile only showed an increase of 2.3%, with the next worst performing (Dumfries and Galloway) having seen increases of 11%.  

Even accounting for difficulties with statistical analysis, taking Scotland as a whole it is clear that it is larger properties that have been the wiser mid to long-term investment for landlords, despite two-bedroom properties being by far the most common to let. There is a sliding scale, from the big hitting four-bedroom properties (33.3%) down to one-bedroom properties which increased the least in percentage terms (16.9%). However, there are many other factors to be considered - for example smaller properties offer a more affordable way for new landlords to enter the buy-to-let market and of course smaller properties require less upkeep too. 

The current year: 2017-18

Most regions fared well for average rental prices of two-bedroom properties, with the majority of areas showing stable, modest increases of between 0% and 4%. Exceptional performance was seen from Forth Valley, East Dunbartonshire, Lothian and Scottish Borders areas - all showing increases of 4% or more, with only Aberdeen and Shire showing a decrease in average (mean) rents for two-bedroom properties between 2017 and 2018.

17 out of 18 areas saw increases in average rents for three-bedroom properties, with only Perth and Kinross bucking the trend, showing decrease of 4.1% over the year. The regional trends combined to show an increase of 8.7%, compared to the CPI of 2.4%. 

A similar story emerges for four-bedroom properties, with 12 out of the 18 areas showing increases in average rents, with the Scottish Borders having a whopping 25.6% rises in rental prices over the course of the year. Scotland, when taken as a whole, saw average increases in rental prices of 11.8% for four-bedroom properties, again massively outperforming the CPI of 2.4%. 

Caution is advised when considering rent levels and trends for property sizes within Broad Rental Market Areas which are based on small sample sizes.

Read the full report