Short-term lets: consultation annexes

Housing Market in Scotland

Private Rented Sector

The different housing tenures are displayed in Figure 6. The private rented sector (PRS) in Scotland has more than doubled in size since 1999, and in 2017 accounted for more than a seventh of all homes in Scotland. The number of owner occupied properties rose from 1.49 million in 2006 to 1.52 million in 2009, fell back to 1.46 million in 2013 then rose slightly to 1.50 million in 2017^[24].

Figure 6 – Number of dwellings by tenure, Scotland, 1981-2017

Source: Housing Statistics for Scotland 2018

Note: Estimates from 1991 to 2000 are based on the 1991 Census. Estimates from 2001 onwards are based on the 2001 Census, GROS dwelling counts and Scottish Household Survey (SHS) tenure splits and are not strictly comparable. 2007 figures are provisional.

Retrieved from https://www.gov.scot/publications/private-sector-rent-statistics-2010-2018/pages/11/ [Date accessed 20/02/19]

Table 10 – Estimated stock of dwellings by tenure across Scotland, 2017

Dwellings by tenure	Number	Percentage
Total number of dwellings (000s)	2,585	-
Total number of occupied dwellings (000s)	2,480	96%
Total number of vacant dwellings (000s)	105	4%
Privately owned dwellings, of which:	1,895	73%
Owner occupied	1,502	58%
Rented privately or with a job / business	393	15%
Vacant private dwellings and second homes	97	4%
Socially rented dwellings, of which	594	23%
Housing associations	279	11%
Local authorities, New Towns, Scottish Homes	315	12%

Source: Housing Statistics for Scotland 2018

Retrieved from https://www2.gov.scot/Topics/Statistics/Browse/Housing-Regeneration/HSfS/KeyInfoTables

[Date accessed 20/02/19]

Average new let private rents in Scotland have increased for all property sizes between 2010 and 2018 (cumulative increase over 8 years) (Figure 7). As shown in Figure 7, the greatest increase in new let monthly rents was seen for 4-bedroom properties (33.3% cumulative increase) and 3-bedroom properties (26% increase), followed by 2-bedroom properties (21.6% increase) and 1-bedroom properties (16.9% increase).

Figure 7 – Average (mean) monthly private rents (£), Scotland, 2010-2018

Source: Housing Statistics for Scotland 2018

Note: Figures exclude any studio properties, properties with 5 or more bedrooms, or room rents associated with bed and breakfast lodgings. Figures for rooms in shared properties represent "rent only", i.e. exclude any payments for shared services.

Note that some caution is needed when interpreting Scotland level findings. This is because whilst the underlying data aims to be representative of rents within each broad rental market area, no attempt has been made to apply any formal weighting techniques to account for any specific area-level sample sizes or structures when aggregating up to a single Scotland level figure.

Retrieved from https://www.gov.scot/publications/private-sector-rent-statistics-2010-2018/pages/8/ [Date accessed 20/02/19]

For 3 and 4-bedroom properties, and for 1-bedroom shared properties, the latest annual increases of 8.7%, 11.8% and 4.7%, respectively, between 2017 and 2018, are all higher than any previous annual increases since 2010^[25]. Note that these average rent figures are based on data from the Scottish Government Rent Service Scotland Market Evidence Database, which is largely based on advertised rents, and the results will therefore reflect changes to prices for new market level rents rather than changes to rents for existing tenants.

Separate results from the Office for National Statistics Index of Private Rental Housing Prices, which estimates changes to private rents across all private rented households rather than just newly let properties, show that rents in Scotland increased by around 8.5% between January 2011 and January 2019^[26], with an annual increase of 0.7% seen in the 12 months to February 2019^[27].

Houses in Multiple Occupation

A House in Multiple Occupation (HMO) is the only or principal residence of three or more qualifying persons from three or more families^[28]. Typical examples of HMO properties are shared houses or flats and bedsits, hostels, student halls of residence, staff accommodation in hotels or hospitals, and so on. The number of licences in force has generally increased year on year since the introduction of the mandatory licensing scheme in 2001 (Figure 8). On 31 March 2018, there were 15,671 licenses in force, an increase of 2% compared with the previous year^[29]. The majority of HMO licenses released in 2018 were for urban centres, i.e. for Edinburgh City, Glasgow City, Dundee City, Aberdeen City and Fife.

Figure 8 – HMO Licences, 2001-2018

Source: HMO returns by local authorities to the Scottish Government, Communities Analytical Services (Housing Statistics)

Note: Figures for Dundee City reflect the number of licence applications received (i.e. single licence application for a University Halls of Residence containing multiple individual HMOs), rather than the number of licenses actually in force.

Empty Properties and Second Homes

Second homes are homes that are furnished and lived in for at least 25 days in a 12-month period but not as someone's main residence. Unoccupied Exemptions are properties that are empty and unfurnished for less than 6 months and exempt from paying Council Tax. Long-term empty properties are properties that have been empty for more than 6 months and are liable for council tax. In September 2018, there were 24,907 second homes, 45,485 unoccupied exemptions and 39,110 long-term empty properties. Of these long-term empty properties over half (24,471 or 63%) had been empty for over 12 months^[30].

The council areas with the greatest number of second homes in September 2018 were Highland, Argyll and Bute, Fife, City of Edinburgh, North Ayrshire, Dumfries and Galloway, Aberdeenshire, and Perth and Kinross. The council areas with the greatest number of properties empty for 6 months or more in September 2018 were Edinburgh City, Aberdeen City, Fife, Aberdeenshire, Glasgow City and Highland. The council areas with the greatest number of properties empty for 12 months or more in September 2018 were the same but in different order (Glasgow City, Fife, Aberdeenshire, Highland, Aberdeen City and Edinburgh City).

Overall, the number of second homes has decreased, while the number of empty properties has increased during the past few years (Figure 9).

Figure 9 – Second and Lon g term empty (for 6 months or more) properties in Scotland, 2005-2018

Source: Long term empty and second home web tables, 07 Dec 2018

Retrieved from https://www2.gov.scot/Topics/Statistics/Browse/Housing-Regeneration/HSfS/LTemptysecondhomes/EmptySecondhometables

From 1st April 2013 local authorities gained the discretionary power to remove the empty properties discount or set a council tax increase of 100% on certain properties which have been empty for one year or more. This, along with associated improvements in the data held by local authorities, has led to the reclassification of a number of properties and has had a significant bearing on the year-on-year changes in the figures.