Scottish Housing Market Review: Q2 2025

4. Private Rental Sector

4.1. Private Housing Rental Prices

CityLets data shows growth in new-let rents in Scotland has fallen significantly from its peak of 13.7% in Q3 2023 to 4.4% in Q1 2025 (Chart 4.1). Rightmove data shows a similar trend, with a fall in new-let annual rental growth from 14.5% in Q3 2023 to 5.1% in Q1 2025. Slightly more recent Zoopla data for April 2025 estimates annual new-let rental growth at 2.4%, down from 9.8% a year earlier. The gap which had opened up between nominal new-let rental growth and annual CPI growth when CPI inflation began to fall from its peak of 10.8% in Q4 2022 has now began to close, with annual real-terms growth in new-let rents as recorded by Citylets falling from a peak of 9.4% in Q2 2024 to 1.5% in Q1 2025.

It should be noted that letting agencies only cover around half of the private rented sector, and each letting agent's data will be affected by its market coverage, which will vary by geography and market segment. Furthermore, since letting agent statistics are based on new-let rents, they were not directly affected by the Cost of Living (Tenants Protection) (Scotland) Act 2022 rent cap restrictions from September 2022 to March 2024, or the temporary modification to the rent adjudication process which applied from April 2024 to March 2025, both of which applied to existing tenants only. As from April 2025, the rent adjudication process has reverted to the position prior to the Cost of Living Act, whereby if a tenant applies to the Rent Service Scotland for a review of a rent increase notice, the rent will be set at the open market rental value.

Source: CityLets and ONS