Neil Thomson, property manager at the Glasgow office of the letting and estate agency, D J Alexander, said: “We’ve had no shortage of calls from potential investors making tentative inquiries about buying flats as investments in the East End, but very little of this seems to be followed up by actual deeds.
“The current shortage of mortgage finance is likely to be having some effect but as far as a post-Games East End goes, it looks as if investors are, for the moment, just dipping their toes in the water.”
This is trend reflected in current tenant demand, with most of it continuing to be focussed on the West End, City Centre and South Side, as revealed in the latest release of the firm’s quarterly Rental Tracker.
Based on returns from the most popular locations for privately rented properties, the average monthly rental for a flat in Glasgow is £706 and for houses £829.
Neil Thomson said: “The rental figures for one- and two-bedroom flats are slightly up on the same quarter last year. For as long as the current mortgage famine remains, demand for rental will remain high and for the time being the Glasgow market could probably absorb more flats without any debilitating influence on rental levels.”
The West End or Merchant City was the first choice of most new tenants said Mr Thomson, however demand for accommodation in Shawlands was “ticking over rather than booming”.
He continued: “There are properties currently available for sale in the West End which offer excellent rental yields for investors as a result of them being put on the market at or even below the official valuation. Before the financial crash, prices were rising to such an extent that rental yield was reduced to a minimum. But with lower prices the yield achievable on rent is now looking very attractive.”
In Edinburgh the average rents for new lettings of one- and two-bedroom flats were £597 and £783 per month respectively in the quarter to the end of March – up 7per cent and 5.6 pc on the first three months of 2010.
COMPROP SCOTLAND, 26 A[pril 2011