Demanding times for Scottish residential rental market
Thursday, July 24th, 2008
on behalf of Citylets
Property across Scotland is letting faster than at any time in recent years with continuing high tenant demand, according to latest research by Scotland’s leading online letting portal Citylets.
The Citylets quarterly report, Trends in Scottish Residential Lettings, released today, shows that more properties are being let, and being let more quickly, than in the same quarter of last year. The report also shows that Scottish rents rose by 4.5%- the highest rate of increase recorded.
The Q2 (Apr-Jun) 2008 report shows the average time it takes to let one/two bed flats – particularly in Edinburgh and Glasgow – has dropped sharply, as rent levels rise.
The number of properties let in the quarter increased 21% on Q2 2007 and taken together with falling time-to-lets, rising rents and high levels of property for sale all points to the increasing popularity of renting over buying.
Thomas Ashdown, Managing Director of Citylets, said: “While other sectors of the economy may be facing challenging conditions, the residential lettings market is going strong.
“The surge in demand for rented accommodation first seen in November of last year has been maintained. The ongoing credit crunch and difficult housing market suggests that there will be no let up in people looking to rent in the short to medium term.
“We believe rents will continue to rise at a faster rate than in previous years but, while there may be some big hikes in specific postcodes for some lucky landlords, on the whole we expect increases to be reasonable.
Glasgow experienced a significant fall – the largest recorded in years – in the average time taken to let two-bedroom flats – sitting at 31 days which is six days less than in Q2 2007. Rents rose 3.1% to average £573.
Thomas Ashdown said “This indicates a substantial change in the Glasgow market where for some years two beds haven’t seen much variation in the time taken to let. It suggests the heightened demand is taking up the previous excess stock of two bed flats.
“This will be welcome news to landlords with the large falls in time-to-let (TTL) rates widespread across the city and just not confined to popular areas.”
The only significant hotspot was G31 (Dennistoun) postcode where 1&2 bed flats rented faster than average in 23 and 21 days respectively.
The average rent for all properties in Glasgow rose to £581 – up from £559 in Q1 2008.
Edinburgh continued to see strong demand for one and two beds flats in Q2 2008. These flats let around 20% faster than in the same period last year with the average TTLs 5/6 days less than in Q2 2007.
The speed to let for one bed flats in particular (just 20 days on average) reflects the high demand from young professionals and first time buyers – with 77% of these properties being let within a month and 30% within a week.
Somewhat surprisingly, rents for one bed flats, (now averaging £529) only rose 2.9% on Q2 2007. Rental values for two bed flats grew 5.6% to average £676.
The seasonal rush for student accommodation echoed 2007 with 47% of all larger properties marketed in the quarter being let within two weeks or less.
The average rent in Edinburgh now sits at £749 – up from £720 in Q1 2008.
Demand for one bed flats in Aberdeen is unrelenting and again showed some of the most impressive figures – with 88% letting in under a month and 31% within a week. Average rents for one bed flats rose to £567 – up 11.7% compared with Q2 2007.
There was a 35% surge in the number of two bed flats being let in the quarter but with prices remaining stable (£822) it would appear supply is meeting demand.
In Aberdeen, average rents are sitting at £868, up marginally on the Q1 2008 figure and again confirming the flat trend which has been in place since Q3 2006.
* A copy of the report is attached or is available online at www.citylets.co.uk/reports
Issued on behalf of Citylets by Holyrood Partnership. For further information please contact Raymond Notarangelo on (0131) 561 2244 or [email protected]
www.citylets.co.uk was launched in 1999 and is Scotland’s most successful letting portal.
The Trends in Scottish Residential Lettings report, is compiled from 30,000 annual lettings through over 200 agents, and provides the only independent analysis on the Scottish rental sector. Its quarterly report is the country’s only detailed and independent barometer of the rental market and is used by investors, letting agents and financial institutions alike.