News and Press releases

Heading home for a night in the office

03/10/2010

Scottish property experts are planning to convert empty office buildings into flats to meet an explosion in demand for rented accommodation.

David Alexander, owner of letting aqgent, D J Alexander, sways offices in townhouses could easily be returned to their original use as family homes or flats as the lack of affordable mortgages fuels a boom in the rental market.

Alexander said town centres are awash with empty offices following the economic downturn. Those in older buildings are proving particularly difficult to sell for commercial purposes as companies favour new open-plan developments.

But he says that if converted into lets, many of these properties, some in prime locations such as Edinburgh’s New Town and Park Circus in Glasgow, would be snapped up by young people who are unable to get a foot on the property ladder
One precedent is the way in which former hospital buildings have been converted into sought-after city centre properties. Although developments such as Edinburgh’s Quartermile – redeveloped on the former Edinburgh Royal Infirmary site – have been held back by the recession, its flats have proved popular.

Buy-to-let boomed before the property crash in 2008 on the back of cheap mortgages. About a third of the UK’s 3.3 million privately rented homes have been bought with a buy-to-let mortgage. But although the industry nosedived when banks stopped lending during the financial crisis, the continuing shortage of ordinary mortgages has now driven up demand for rental property.

“While the commercial (office] market has been quite badly hit, demand for rented accommodation has been incredibly strong, and certainly stronger than I have ever known in my 29 years in this business,” Alexander said.

“With the lack of finance and confidence in the homebuying market, people have obviously turned to renting. There are lots of empty commercial properties around and planners are very keen for these older properties to be turned back into residential use. A lot of these buildings don’t make great offices but, my goodness, they make good flats.”

During the 1980s and 1990s, companies sought prestigious premises in areas such as Palmerston Place in Edinburgh’s West End. But with advances in technology and a new fashion for open-plan offices, these buildings are becoming increasingly difficult to let out.

DJ Alexander has recently taken on a chartered surveyor to liaise with bankers, developers and solicitors in a bid to turn some of these unused sites into much-needed rental homes.

The company believes landlords who own secondary – or “grade B” – offices could benefit the most as they struggle to compete with new developments, many of which are being offered at bargain prices.
Property experts say the new breed of buy-to-let landlords are likely to have access to a sizeable amount of cash. They argue that although some banks have re-introduced buy-to-let mortgages, loans for this kind of venture remain scarce.
The Association of Residential Lettings Agents warned earlier this year that the UK is facing a “severe rental housing shortage” due to the ongoing problems in the mortgage market. Recent figures showed that the number of mortgages approved in August hit the lowest level for 16 months.

SCOTLAND ON SUNDAY (Business Section), 3 October 2010

Housing market can be helped by not interfering, writes David Alexander
31/12/2010

The Guide Top Ten: Avoid the renting pitfalls to secure a happy home
11/12/2010

Sealed bid system has not afflicted city's rental market
03/12/2010

Rent bills on the increase
29/11/2010

Buy-to-let up as rental demand grows
13/11/2010

A GRAND GEORGIAN GEM
12/11/2010

Property ‘gap’ prompts switch from commercial to residential
09/11/2010

Rental 'gazumping' on the up as demand rises
08/11/2010

The hard sell: how solicitors and estate agents are coping with the harsh new realities of the property market
01/11/2010

Burnett off to DJ Alexander
29/10/2010

My working week...
22/10/2010