Capital rentals up by 10pc

20/01/2012

However ‘balanced’ level of supply and demand
prevents costs from going through the roof

The long-term increase in the cost of privately-rented housing in Edinburgh – much of it due to the home loans shortage – has been confirmed by the latest Rental Tracker, produced by the letting agency, D.J. Alexander.

The average cost of rentals registered in the capital since the Tracker was launched at the start of 2009, has risen by slightly more than 10 per cent averaged out over the period. However Glasgow averages have fallen by just over 5 per cent over the same period.

David Alexander, proprietor, said: “Fortunately for people seeking accommodation, a reasonable level of supply and demand has prevented rental levels from going through the roof, although the most attractive, and properly priced, accommodation tends to be let in hours rather than days or weeks. Just before Christmas, for example, one landlord client turned down an offer of £900 a month for a flat that was marketed at £1,000; his instinct proved to be right because later that same day someone else came along and offered to pay the full price being asked for.”

Mr Alexander said it was important to emphasise that the figures were averaged out over the entire market – from one-bedroom, inner city flats to luxury villas in the best suburbs. He continued: “Some properties will have undergone substantial rental rises, other less so, while the mortgage situation means there are more and more properties becoming available which have not been rented before and therefore for which there is not a benchmark.

“The Glasgow figures may have been skewed by homes that are not traditionally rental material coming onto the market. All the evidence from business conducted at our Glasgow office suggests rentals for the most popular properties, i.e. one- and two-bedroom flats, are holding up well, especially in areas like the Merchant City, Hillhead and Shawlands.”

Mr Alexander said most landlords could be satisfied that rental yields in relation to current capital values were very strong. “This is why buy to let is attracting relatively wealthy private investors who have been sitting on large cash surpluses and receiving next to nothing in interest after inflation is taken into account.”

The statistics show that average monthly rentals registered in Edinburgh were: 2009, £792; 2010, £834; 2011, £862. For Glasgow the figures were: £788, £771 and £734 respectively.

AVERAGE RENTALS FOR THE PERIOD 1 September to 31 December 2011

EDINBURGH

Flats

One-bed Two-bed Three-bed Four-bed Five-bed Average
£606 £788 £1276 £1409 £1700 £813

Houses

Two-bed Three-bed Four-bed Five-bed Average £987 £1723 £1396 £1900 £1333

Others (hybrids, e.g. mews, etc)
£834

GLASGOW

Flats

One-bed Two-bed Three-bed Four-bed Average
£557 £721 £1041 £1500 £701

Houses

Two-bed Three-bed Four-bed Average
£575 £619 £698 £631

Others (hybrids, e.g. mews, etc)

£716

“Glasgow” equates to the city proper plus peripheral districts such as Bearsden, Milngavie, Clarkston, Newton Mearns, etc.

Press Release issued by D J Alexander on findings of its lates ‘Rental Tracker’