The ban on tenant fees has pushed up rents since it was introduced in Scotland in 2012, according to Your Move.
Its analysis shows that before it became illegal to charge tenant fees in November 2012, average monthly rents had hovered around £508 for almost two years, but that in the 21 months since the ban came into force, the annual increase has averaged 2.3 per cent.
Overall, this means that tenants in Scotland are now paying an extra £26 a month in rent on average than before the legislation was introduced, far more than the typical costs tenants previously paid when setting up their tenancy.
"Tenancy fees were outlawed in Scotland with the well-meaning intention of protecting thousands of households reliant on rental accommodation," said Gordon Fowlis, regional managing director of Your Move, which is part of LSL Property Services. "But we can see that in reality tenants are starkly out of pocket. They are paying much more over a 12 month tenancy than they would have expected to pay for a single set-up fee, adding to the daily cost of living challenge. Banning fees has heightened the financial strain on tenants, as greater costs are now incurred elsewhere through rents increasing at a faster pace.
"After the consequences we’ve seen of previous government intervention, the biggest threat to the private rented sector is further unwarranted regulation. As we move into the final furlong before the referendum, all sides need to be careful not to scare landlords off the playing field as private renting is now a key integral solution to fulfilling Scotland’s housing needs. If private landlords sell up and leave the rental market due to more well-meaning, but clumsy, regulation this could force a housing shortage for renters."
According to the report, the fastest annual increase is in the south where the average monthly rent is now 4.8 per cent (or £23) higher than in July 2013, followed by a 3.6 per cent annual rise in Edinburgh and the Lothians.