‘No mortgage’ young professionals pushing up capital’s rental rates

07/07/2010

For all the talk of recession, there has been a substantial rise in average rental levels for larger properties, according to the latest Rental Tracker by the letting and estate agency, D J Alexander, which covers the three months up to the end of June. The average rent of a four-bedroom flat shot up from £1,293 in the first quarter of the year to £1,536, while the rental costs of five-bedroom houses was up from £1,715 to £2,133.
Rob Trotter, the firm’s senior property manager, said: “We let five period houses or large flats in the New Town during the last two weeks of June at rentals of between £3,500 and £3,700 a month, yet over the past seven years we would only ever expect to achieve rents at this level perhaps once or twice in any six-month period. And the demand is not just confined to the New Town; we currently have an offer of £4,250 for a flat at the Quarter Mile development which the landlord is considering.”
According to Mr Trotter, the demand is being driven by a mixture of relatively affluent professionals currently living in the city and those who have moved to Edinburgh for employment reasons. “They don’t have mortgages to worry about, they feel it will be some time before house prices start rising and so they have decided that renting these properties offers a lifestyle opportunity,” he said.
However demand is not confined to the upper levels of the market. “We’ve been inundated with requests for property across the spectrum – from one-bedroom flats to five-bedroom villas, with June particularly buoyant,” Mr Trotter added.
The Rental Tracker shows that total lettings secured by the company’s Edinburgh office during April, May and June were 338, with the cost of new rentals up slightly on the first quarter of the year – from an average of £791 a month to £812 a month.
The average monthly rent in all three categories was also up – flats (from £776 to £802), houses (from £1,136 to £1,219) and mews and other hybrid homes (from £791 to £812).
Meanwhile in Glasgow, lettings were up from 84 in the first quarter to 113 – more than 30 per cent. Average flat rentals were £783, for houses it was £763 and for hybrids (mews properties, etc), £628. Two-bedroom flats were most in demand and secured an average monthly rental of £776. The number of one-bedroom flats let was double that of the previous quarter and the average monthly rent was, at £614, around 25 per cent higher.
David Alexander, proprietor, said: “The value of the D J Alexander rental tracker is the manner in which it focuses on those locations most popular with professionals of all ages looking for a quality flat or house to rent – in other words, places where current and potential tenants actually want to be, like Bruntsfield in Edinburgh and the Byres Road area of Glasgow. As a result our figures are not skewed by input from the sub-prime sector of the market. “Private houses for rent are rather different in location terms because, with the exception, perhaps, of Edinburgh’s New Town, there are no actual defined house rental locations. A lot of the houses currently on the rental market are only there because their owners are unable to find a buyer or have decided now is not the time to sell.”

Press release issued to coincide with the second edition of our new Rental Tracker. 7 JULY 2010