Housing crisis deepens as city rents soar 20%

07/04/2008

The cost of renting property in Edinburgh has soared as the city’s affordable housing crisis deepens.

Leading letting agents say the average rent for a two-bedroom flat in the Capital has increased almost 20 per cent, from £675 a month at the end of last year to £800 a month now.

And there are warnings tenants will have to pay up to 50 per cent more next year as a shortage of supply has an impact on prices.

t comes as more people look to rent in the city because of the credit crunch making it difficult for many to take out mortgages.

David Alexander, head of letting agent DJ Alexander, said that first-time buyers were facing the most expensive mortgages in seven and a half years.

He said: “The result is an increase in rental costs which is unprecedented in the 25-plus years in which I have been in this sector.”

The firm, which advertises more than 1400 flats in Edinburgh every year, predicts the average rent for a two-bedroom flat could surge to £1200 by next year.

Steven Currie, director of the agent’s Edinburgh office, said: “The sales market is softening slightly.

“People aren’t getting the mortgages to buy so they are looking to rent. It is tough for people but the rental market needed a boost because over the last ten years rents haven’t changed much.”

He said that many owners have been investing more money in furniture and fittings in order to be able to ask for more rent. DJ Alexander let a one-bedroom luxury flat in Fettes Row last week for £875 a month – £125 more than they let it out for a year ago.

“It’s a typical executive pad in the heart of the New Town and people would pay £875 a week for it in London, so £875 a month in Edinburgh isn’t bad,” said Mr Currie.

By MICHAEL BLACKLEY, Business Editor

EDINBURGH EVENING NEWS, 7 April 2008