Aberdeen has maintained its position as Scotland’s letting hotspot with rental prices continuing to outperform the rest of the country, according to latest research by Scotland’s leading online letting portal Citylets.
Rents for one bedroom flats in particular have surged upwards as well as being let quicker than anywhere else in Scotland.
The latest Citylets quarterly report, Trends in Scottish Residential Lettings, also revealed that demand remained strong and was matched by an increase in supply, inevitably linked to some people who have opted to rent out their properties because they cannot sell in the current market.
The report, covering the period July-Sep 2008, showed rent levels for one bedroom flats jumped by 9.5%, compared with July-Sep 2007, to sit at an average of £578. The average time taken to let a one bed flat was just 18 days, compared with 31 days in Glasgow.
However, the position is different with two bed flats where rent levels have fallen by 2%, possibly due to the increase in supply and a fall in corporate lets because of the recent decline in oil prices.
Across Scotland, there was a 38% increase in properties let, driven by unprecedented levels of demand from people who have been frozen out or put off buying because of the credit crunch.
Thomas Ashdown, Managing Director of Citylets said: “While across the country we have seen a significant change in the make-up of Scotland’s housing market, Aberdeen’s rental sector does not appear to be as directly affected by the collapse in confidence in property buying.
“Aberdeen remains the dominant city in the rental sector for headline rents, particularly for one bed flats.”
www.citylets.co.uk was launched in 1999 and is Scotland’s most successful letting portal. Its quarterly report is the country’s only detailed and independent barometer of the rental market, based on 30,000 annual lettings through 200 agents. It is now a respected tool among investors, landlords and letting agencies.
The report shows that average rents in Aberdeen continue on an upward slant, now sitting at £879 compared with £868 in the second quarter.
The report also reveals that there has been a large surge in new properties coming onto the market which has seen stock levels across Scotland rise despite record demand.
Thomas added: “Normally, stock levels show an increase in supply throughout the first half and then decline sharply in the third quarter and stay fairly low through the last quarter. This year things started in a similar fashion, but stock levels over the last three months have swelled considerably.
“What we have seen in the last quarter reflects common sense expectation. The immediate effect of the credit crunch was an increase in rental demand followed by the onset of a slump in property sales which in turn has fed supply. It is all connected.
“The slowdown in the property market has seen a new wave of ‘reluctant landlords’ – home owners or small-scale property developers who are unable or unwilling to sell in the current markets – look to rent out their homes.”
Thomas added: “This has been an astonishing period for the Scottish rental sector – we have never seen anything like it.
“But it is important to realise that things can change – if demand peaks and supply continues to climb there will be pressure for rents to flatten out as has happened in other countries such as Ireland.”
Lisa Brebner, Director at Aberdeen-based Simpson, Brebner & Partners, said: “The Aberdeen situation is quite unique as demand for rental accommodation is not fuelled by a struggling property market, rather one that remains buoyant and healthy.
“There is a shortage of one-bed executive flats which has undoubtedly pushed up rents on these types of properties.
“The oil sector is booming, attracting large numbers of people to the city who will be looking to rent. We do not foresee this situation changing any time soon which is great news for the letting sector.”