One of Scotland’s leading letting agents has reported a rise in rents at almost three-quarters of the properties they re-let within a two-month period.
Braemore Property Management said that 74.5 per cent of the flats and family houses it had let out to new tenants in June and July had achieved a higher rent than before.
The company, which is based in Dundas Street and has a portfolio of 800 properties worth more than £250 million, calculated the figures over an eight week period between the start of June and the end of July, and recorded an average rental rise of 4.6 per cent during that time.
And the firm said that the figures showed that Edinburgh’s rental market was continuing to perform well, with overall average rents in the city having increased 15 per cent since 2004.
Colette Murphy, director at Braemore Property Management, said: “With more and more people looking to rent properties in Edinburgh, landlords are finding that they can increase prices to maximise their rental yields.
“During these eight weeks, the majority of properties recorded a rise of anywhere from two to 15 per cent. We’ve also been seeing rents increase in every kind of property – from one bed tenement flats to five bedroom family homes – so it’s a trend across the board.
“But despite the high demand for properties, it’s important to stress that this is still a very moderate rise in rents rather than huge hike in prices. While landlords will be delighted that their properties can be rented out for more than before, rents are still remaining affordable for tenants.
“We’ve seen some letting agents claim that their rents have risen by as much as 50 per cent in recent months and will continue to do so, but our latest figures show clearly that rents are not spiralling out of control.
“We recently carried out a survey among our tenants, with the majority replying that they were happy with the amount they currently pay to rent property and that they felt the rental level was about right. These new figures show that, while rent prices are rising, they are still remaining affordable.”
Colette added that, while some of Braemore’s properties had experienced steady rental rises, many others had seen more moderate increases – as they had long-term renters in them and landlords had kept rents from increasing dramatically in order to keep their tenants content; rather than risking them leaving and incurring a void or marketing costs to re-let the property.
She also said that, although new investors who had bought properties at today’s prices were looking for higher rents to cover the cost of their investment, many older landlords were happy to have a lower rental yield as long as it still make their property profitable.
She added: “A lot of our landlords have been renting out their properties for a long period of time, meaning that they are happy to settle for a more moderate rental rate as their repayments on the building will be fairly low.
“Certainly landlords and agents are trying to achieve the best prices possible but there is a limit to how far the market forces will allow rents to increase. After all, although landlords will want to raise rents as far as possible, they will not risk being under-cut by a competitor and, ultimately, left with no tenants and an empty property that isn’t making any money at all.”