According to the latest Citylets report on the Scottish rental market, the second quarter of 2023 was one which saw demand outstrip supply once more, and rental rates rise by double digits across the board, despite the introduction of the Scottish Government’s ‘rent cap’.

Average rental rates for new tenancies rose in many areas of Scotland by double digits for the third time in a row, as the impact of the Cost of Living (Tenant Protection) (Scotland) Act 2022 took hold. To offset the freeze in rental rates for existing tenancies, compounded by continuing rises in mortgage rates, many landlords have been raising the rents to maximum levels for new tenancies, exacerbating the supply-demand imbalance that has affected the market so severely in the last few years.

The new average rental rate for Scotland’s private rental sector sat at £1,081 per month, however the rate of growth eased to 11.4% year-on-year from 12.4% in the first quarter of 2023. In Edinburgh, the rental rates jumped 15.1% year-on-year to a new average of £1,477, while in Glasgow, a similar increase of 14.4% saw rents rise to an average of £1,141. Across Scotland, two-bedroom properties saw the biggest increase, with a 12.8% rise taking the average rental rate of this property type to £1,006 per calendar month.

Supply and demand remained an issue for the rental market, with stock levels down 10% year-on-year as we head into Q3, traditionally the busiest period of the year for new tenancies. Agents and landlords reported an average of 100 enquiries per property advertised, demonstrating how strong the demand continued to be for quality rental properties across the country.

The average time to let across Scotland was 19 days, with one-bedroom properties letting the fastest in 16 days.