Rent prices in Edinburgh have recorded their first fall in years as the capital’s rental market suffers from an excess of properties being put up to let.
New research by Braemore Property Management, the Capital’s leading letting agent, has revealed that with an over-supply of stock caused mainly by an increase in the number of properties being put up for rent by “reluctant” landlords, the average rent level in the city has dropped by more than £50 over the past three months.
The statistics have been gathered from every property that has been let or re-let by the firm – which has a portfolio of more than 850 properties across the Capital worth more than £250 million – between January and March 2009.
The data shows that in January, the average rent fall across the city was £19 – based on a total of 33 properties let or re-let during the month . The most affected area of the city during this period was in the Newhaven/Leith area, where in one case a new-build property was re-let for up to £200 less than their previous rent price.
In February, the average rent paid for re-let properties was £670 – a drop of £52. New build and larger homes were the most affected, with the average rent for a 3-bed property during the month down by £105.
In March, the average rent for properties re-let fell by £58 – from £732 to £673. Once again, larger properties suffered the highest falls, with the average rent for a 3-bedroom home down £126 and the average rent for a 4-bed property down £50.
Colette Murphy, director at Braemore Property Management, said: “It’s important to stress that there is still a lot of demand for rented accommodation in Edinburgh. We are carrying out more viewings than we were at the same time last year. Many people are choosing not to buy a home in the current economic climate and, instead, want to rent – either as a lifestyle choice or in order to save up enough money to use as a deposit on a home when the housing market improves.
“However, this has coincided with a rise in the supply of homes being put on the rental market. Many reluctant landlords – people who have turned to renting after failing to sell their property – have entered the rental sector and there is a much wider choice available for tenants.
“With so much choice available for tenants, and greater competition between landlords, we have started to see rent levels decrease in recent months. It is a trend that we are witnessing across the city, but there are certain locations and types of property that have been more affected.
“Large family homes or 3-bed flats in particular have seen the biggest falls, along with new build properties in areas like Granton and The Shore. Because there is a surplus of these types of rented homes, landlords have been reducing rent levels in order to attract tenants and avoid lengthy void periods.”
The trend has also been highlighted in the latest Citylets quarterly report, which showed that average rents across Scotland had decreased year-on-year by 1.1% to £638 during the period January-March 2009.
The report also showed that 1 & 2 bed flats in Edinburgh had recorded their first annual declines since Citylets started recording data in 2003, down 1.1% and 1.9% respectively. It also highlighted that the greater choice of rental property available to tenants has also had a dramatic effect on time-to-let averages, which have lengthened considerably.
Colette added: “We’re in a period of uncertainty as far as the rental market is concerned and landlords need to be more aware of the changing conditions – although many are already starting to adapt to the changes. In some cases they are reducing rent levels in order to attract tenants but we are also seeing landlords investing heavily in their properties to make them more attractive to potential tenants.
“Until the housing market recovers, we are unlikely to see a fall in demand for rented accommodation, but there is certainly a wide choice available for tenants at the moment and this is having a direct effect on rents.”