The ban on tenant fees has accelerated rent rises in Scotland with annual average rents up 2.3% after years of stability, according to the latest published index.

The average rent in July was £534 per month compared with £508 per month before the fees change, the first rise in almost two years, the buy to let index from Your Move, part of LSL Property Services shows.

It also reveals that tenant finances healthier than south of the border, with 15% less rent in arrears in Scotland and landlord total returns are three times as high as a year ago, climbing to 9.9% a year or £14,994.

This means that tenants in Scotland are currently paying an extra £26 a month in rent on average than before the legislation was introduced, amounting to £312 across a year. This is substantially more than the typical upfront costs tenants used to pay when setting up their tenancy.

At an average of £534 a month, this is the highest level of rent in Scotland on record but is still 29% lower than the average monthly rent across England and Wales, which was £753 in July 2014.

‘Tenancy fees were outlawed in Scotland with the well meaning intention of protecting thousands of households reliant on rental accommodation. But we can see that in reality tenants are starkly out of pocket,’ said Gordon Fowlis, regional managing director of Your Move.

‘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. Before this policy was implemented rents had been flat, relaxing the burden on household budgets and giving tenants some breathing space to climb back on their feet after the dark days of the recession. Banning fees has heightened the financial strain on tenants, as greater costs are now incurred elsewhere through rents increasing at a faster pace,’ he explained.

He pointed out that 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,’ added Fowlis.

Overall the data reveals that in four out of five regions in Scotland, rents are higher than a year ago. The fastest annual increase is in the South, where the average monthly rent is now 4.8% higher than in July 2013.

This is followed by a 3.6% annual rise in Edinburgh and the Lothians, and annual rent uplift of 3% in Glasgow and Clyde. In both of these areas, rents reached the highest level on record in July. In the East, there has been no annual change in average rents,…