Publication - Research and analysis

Scottish Housing Market Review: January - March 2021

Published: 30 Jun 2021

Summary of the latest Scottish housing market data.

Scottish Housing Market Review: January - March 2021
Rental Prices

Rental Prices

Chart 3.1 Annual Change in Private Housing Rental Prices (Monthly): Scotland
Chart 3.1 shows the annual change in private housing rental prices in Scotland on a monthly basis in both nominal (not accounting for inflation) and in real terms (removing the effect of inflation).  In May 2021, inflation in nominal terms reached 1.3% annually but when we remove the effects of inflation, this falls to a 0.8% decrease.

Source: ONS Rental Price Index, Consumer Price Inflation (CPI)

Private Housing Rental Prices

Private housing rental prices increased by 1.3% annually in Scotland in May 2021. This continues a period of relative stability in nominal private rental price growth. Since October 2015, rental price growth has ranged between 0% and 1.5%, with an average of 0.5%. In real terms (adjusting for inflation, using CPI), the annual change in May 2021 was -0.8%. Chart 3.1 shows that the annual change in real private housing rental prices rose towards positive territory as CPI inflation fell due to the impact of Covid-19, but it has returned to negative territory with the recent increase in CPI inflation, which reached 2.1% in May 2021. This moderate growth in average rents across Scotland in recent years masks significant regional variation, as illustrated by Chart 3.2.

A ban on the enforcement of eviction orders in areas in Levels 3 and 4 is in place until 30 September 2021, although all areas in Scotland are currently in Level 2 or lower. The Coronavirus (Extension and Expiry) (Scotland) Bill, passed on 24 June 2021, has extended additional protections for tenants to 31 March 2022: in particular, measures increasing the notice period for social and private evictions to 6 months in most cases, giving the First Tier Tribunal discretion when considering all grounds for eviction in the private rented sector, and requiring private landlords seeking eviction on rent arrears grounds to follow Pre-Action Requirements. The Scottish Government has also announced a new £10 million grant fund to support tenants struggling to pay their rent as a direct result of Covid-19.

Chart 3.2 Annualised Average Rate of Change in Mean Rent (2 Bedroom Property), YTE Sept-10 to YTE Sept-20, by BRMA
Chart 3.2 outlines the annualised average rate of change in mean rent for a 2 bedroom property. This covers the period from September 2010 to September 2020.

Source: SG/ONS CPI

* Note: Scottish Government statistics are based almost entirely on advertised rents at point of new let, and thus will tend to be higher than the ONS data which makes an allowance for rent changes in existing lets. In addition, chart 3.2 looks solely at 2 bedroom properties, whilst 3.1 looks at the entire market