Number of Scottish managed properties above average according to ARLA PRS report

Tuesday 31 January 2017

According to ARLA’s latest monthly PRS Report for December, the average number of properties managed per branch in Scotland was 248, well above the UK average which was 188. This trend has been consistent in recent months and represents a strong finish to 2016 for the private rented sector in Scotland.

The figure for December is actually down from an average of 300 properties manged per branch in November, with the UK average of properties managed per branch also down at 185. The figures for November were, however, up from a UK average of 180 properties in October and up from an average of 250 properties managed per branch in Scotland that month.   

Prospective tenants

Despite these figures the average number of perspective tenants registered per member branch in Scotland was 13 in December, whereas across the UK as a whole, agents recorded 26 on average. Howeverthe figures in our Private Rented Sector Report for November showed that number of prospective tenants registered per branch in Scotland was 24, below a UK average of 31 per branch.

In October, letting agents in the UK had 34 prospective tenants registered on average per branch, the lowest level since May, whilst the number of registered prospective tenants registered remained at 24 in Scotland.

Rents

According to ARLA’s December’ Private Rented Sector Report, the number of landlords across the UK hiking rent costs increased to 19%. In its latest Scottish Buy to Let Index, Your Move reported that “across Scotland rents increased or remained stable in every single region between October and November and that yields and tenant finances have also remained steady since last month.”

When looking at Citylets Rental Market Report for Q4 2016 it shows that “rents in the Scottish PRS as a whole recorded an uncharacteristic dip in Q4 2016, down 0.9% on the year to stand at £739 per month on average.” They conclude, “The national average has experienced significant drag from Aberdeen for 8 quarters however it is usually countered by circa 6% growth in Edinburgh and, more recently, in Glasgow too resulting in overall positive growth. However a slight, possibly seasonal, cooling in the central belt in Q4 saw annual growth slip into mild negative territory.”

What does this mean?

  • There remains lots of choice for prospective tenants looking to rent in Scotland

  • Rents are remaining stable or increasing across Scotland

  • Tenant enquiries remain high (despite December dip)

  • The market has been resilient to 2016 legislative changes (Brexit, government legislation, taxation changes)

Looking to the future

ARLA’s PRS report for December also showed that in Wales over half (57%) of agents saw rent increases in December. From 23 November 2016 all letting agents in Wales (and the wider UK who either let or manage rental properties in Wales) must be suitably trained and licensed to carry out letting or property management activities. Letting agents and landlords were given 12 months to comply, the deadline has now passed and enforcement has started. Therefore with Rent Smart Wales having come into effect, the cost of regulation and who eventually pays, as the added costs are pushed on to tenants, is readily apparent.

In 12 months’ time the private rented sector in Scotland will get an entirely new tenancy regime under the Private Housing (Tenancies) (Scotland) Act 2016, and the sector will have to grapple with mandatory letting agent registration and code of conduct. Under the Housing (Scotland) Act 2014 letting agents will have to meet new registration, regulation and training requirements for letting agents in Scotland. Letting agents will also need to hold not only professional indemnity insurance, but also client money protection. 

Time will tell whether increased regulatory requirements will push up rents in the private rented sector in Scotland, but the signs look like they might. As the sector continues to grow it will be increasingly important for letting agents to present property that is maintained to a high standard and more vital than ever that agents have the correct knowledge and training.

Members can use the legal helpline, our increasing library of fact sheets to stay up to speed with legislative changes and our qualification and training bundles will ensure that you are ready for regulation.