Citylets is Scotland’s most respected portal for rental properties – and has spent two years developing the country’s only credible study of national rental trends.
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Scotland’s property market is experiencing seismic changes as people turn their back on house buying in favour of renting, according to latest research by Scotland’s leading online letting portal Citylets.
Unprecedented levels of demand from people who have been frozen out or put off buying because of the credit crunch have lead to a surge in rental properties being snapped up over the last three months.
The latest Citylets quarterly report, Trends in Scottish Residential Lettings, also revealed that high demand is now being matched by a boom in supply with significant numbers of the new listings coming from so-called ‘reluctant landlords’ or people who are putting their homes up for rent because they cannot sell or don’t want to sell in a difficult market.
The report, covering the period July-Sep 2008, showed there was a 38% increase in properties let and a 55% spike in new rental accommodation coming onto the market – compared with the same period in 2007.
Rents have risen again for one and two bed flats across Scotland, another sign that young professionals and couples are no longer buying
Thomas Ashdown, Managing Director, of Citylets said: “There’s no doubt we are seeing a significant change in the make-up of Scotland’s property market.
“The collapse in confidence in the property buying market has seen an enormous swathe of potential home owners divert into rentals.
“But one of the most telling aspects of what has been a dramatic quarter has been the surge in new properties coming onto the market. To see an increase in stock levels against a background of record demand is quite remarkable.
“Normally, stock levels show an increase in supply throughout the first half of the year, then decline sharply in the third quarter and stay fairly low throughout the last. This year things started in a similar fashion, but stock levels over the last three months have grown considerably.”
Thomas said while some of the growth may be attributed to an increase in new Citylets clients over the period, he has no doubt other social factors are contributing.
He added: “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 now fed rental 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 – looking to rent out their homes.
“This really is an astonishing period for the Scottish rental market – we’ve never seen anything like it.”
www.citylets.co.uk was launched in 1999 and is Scotland’s most successful lettings 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 Scotland rose by 4.3%, compared with July-September 2007, with levels for one bed flats in Edinburgh, Glasgow and Aberdeen showing the biggest annual hikes.
Rents for a one bed flat in Aberdeen shot up by 9.5% – letting on average in only 18 days – while similar flats in Edinburgh and Glasgow rose by nearly 6%.
Thomas added: “The recent period has been great for letting agents and landlords but it is important to be aware that things can change. If demand peaks and supply continues to climb there will be pressure on rents to flatten as has happened in other countries such as Ireland.
“That said we are less exposed to dramatic change in Scotland as, despite the best efforts of our banks, we have not been as reckless and the sales market doesn’t have as far to fall.”
* A copy of the report is attached or is available online at www.citylets.co.uk/reports/