Scottish Housing Market Review Q3 2025

4. Private Rental Sector

4.1. Private Housing Rental Prices

Rental market data from several letting agents indicates a slowdown in annual growth for new let rents in Scotland. Citylets data shows the average new let rent increased annually by 3.6% in Q2 2025, which is the fourth consecutive quarter of decelerating growth and is significantly below the recent peak of 13.7% in Q3 2023. Rightmove data presents a similar trend, with the annual growth rate falling from 14.5% in Q3 2023 to 2.8% in Q2 2025. More recent monthly data from Zoopla, covering July 2025, estimates growth at 1.5%, down from 7.8% just a year earlier. With the uptick in CPI inflation in recent quarters, in real-terms rents have largely stabilised, with Citylets data showing new let rents rising only 0.1% in real terms in Q2 2025 (see Chart 4.1).

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.

The Housing (Scotland) Bill was passed by the Scottish Parliament in September 2025. The legislation creates provisions for new long-term, evidence-based rent control measures in the Private Rented Sector in Scotland. Ministers will be able to designate some parts of Scotland as rent control areas in which there will be limits on rent increases. In any area where rent control applies, rent increases will be limited to CPI+1% point, up to a maximum of 6%. Further details, such as any exemptions from rent controls, will be set out in forthcoming regulations.

Source: CityLets and ONS