December 19, 2024
Full articleThe key differences in lettings law and market dynamics between Scotland and England
The lettings market in the UK – especially between Scotland and England – differs more than many may realise. When it comes to tenant protections, landlord requirements, and investment returns, recent changes in Scotland’s rental regulations have prioritised tenant security while also making the market attractive for landlords.
Maddie Waterman, Property Manager at Gilson Gray, has worked across the UK and boasts experience in Scotland and England most recently. In her latest blog, Maddie discusses her key takeaways in the differences between these two key countries.
Tenancy Agreements
Since 2017, Scotland has used the Private Residential Tenancy (PRT) model, which offers open-ended tenancies that give tenants long-term stability. This means tenants in Scotland don’t face frequent lease renewals and potential rent hikes, unlike in England, where fixed-term leases (usually six or twelve months) remain the standard. England’s fixed-term model can lead to uncertain costs for tenants and increases administrative tasks for landlords, who must often renegotiate terms.
The PRT model in Scotland limits landlords to one rent increase per year, capped at 12%, making rent increases predictable and manageable for tenants. In contrast, England does not have a nationwide cap on rent increases, and rents can rise with each new lease term, contributing to unaffordable rent prices in many areas.
Rental Yields
For landlords, Scotland’s property market offers attractive financial returns. Scotland’s average rental yield is 6.18% as of 2024, compared to just 4.29% in London. The Scottish property market also offers lower entry costs with the average property price in Scotland sitting at around £200,000, while in London, it’s a substantial £531,000.
For landlords, this pricing difference means that building a diverse portfolio in Scotland is more achievable, where the high cost of properties in England may limit many investors. Ongoing uncertainty around interest rates and property pricing fluctuations are a constant factor that landlords must navigate in order to make the best return on their investments.
A Fairer Market for Tenants
It is no surprise that Scottish tenants benefit from more affordable rents than their English counterparts. As of 2024, the average rent in Scotland is approximately £973 per month, while in London, it averages at £2,145 per month. This affordability, combined with the rent cap, ensures tenants in Scotland have more manageable housing expenses, promoting better financial well-being and higher retention rates.
In England, where there is no cap on rental increases for tenants in ongoing leases, tenants often face rising costs that outpace income growth, putting strain on their budgets and potentially limiting long-term tenancy. Scotland’s focus on tenant affordability has made it a more attractive location for renters seeking stability and value.
Eviction Protocols
Scotland’s eviction protocols under the PRT require landlords to provide specific, justified reasons for ending a tenancy, such as requiring the property for personal use or a breach by the tenant.
This protocol protects tenants from abrupt evictions and gives landlords a fair, transparent process to follow. In England, the Section 21 “no-fault” eviction still allows landlords to end tenancies without cause, though plans to abolish it are underway.
Scotland’s Leading Lettings Model
Scotland’s approach has created a balanced rental market with benefits for both landlords and tenants alike. For landlords, higher yields, affordable property costs, and fair eviction processes make Scotland a more favourable investment. Tenants benefit from greater affordability, long-term security, and protections against sudden rent increases, resulting in a stable lettings market that supports both affordability and fairness.
As both countries evolve their lettings laws, Scotland’s progressive model sets a strong example for sustainable rental growth, creating a profitable rental environment.
Maddie Waterman
Property Manager
