Stability Returns to Scotland's Rental Market
October 23, 2009 (PRLEAP.COM) Business NewsThe Citylets report, which covers the rental market from July to September 2009, shows that, overall, the market has stabilised at 3.4 per cent compared to the same period in 2008.
And, while some sectors recorded the largest year-on-year decreases to date, the underlying message for landlords and letting agents is that the worst may now be over.
Citylets founder, Thomas Ashdown, said: "We've seen a lot of volatility in the rental market in the last two years. First prices rose as the credit crunch created a boom in rental demand as people couldn't or wouldn't buy.
"Then we had thousands of 'reluctant landlords' - those who couldn't sell their homes and instead put their houses and flats up for rent - redressing the balance. By August 2008, this caused elements of over-supply thus putting a squeeze on prices.
"The Citylets third quarter report records some of the heaviest falls we have ever seen in rents year-on-year. In particular the situation for two-bedroom flats in Glasgow and Edinburgh worsened slightly, down 7.7 per cent and 2.6 per cent respectively year on year.
"However, I think that we are now at the bottom of the curve and with demand remaining strong and the housing market seemingly on a more even keel, it is likely we should be moving to a more stable rental sector in 2010.
"Across Scotland rents are down but they are no worse than what they were in the second quarter, which suggests that the market has leveled off. The next report at the end of the year will be very interesting."
Citylets was launched in 1999, and is now Scotland's most successful lettings portal featuring homes and flats in Edinburgh, Glasgow, Aberdeen and other Scottish cities.
The letting portal's quarterly reports present a detailed and independent guide to the rental market in Scotland. They are based on 50,000 annual lettings from over 300 agents, and are highly respected among investors, landlords and letting agencies.
Citylets third quarter report states that:
* The average rent for Scotland in Quarter 3 of 2009 was £640, compared with £663 for Quarter 3 in 2008. This represents a 3.47 per cent reduction in the average property price.
* The position city by city is: Edinburgh £729 vs £762 (-4.3%); Glasgow £584 vs £593 (-1.5%); Aberdeen £830 vs £891(-6.8%)
* Aberdeen experienced the greatest changes in rental activity. One-bed flat rents fell 6.1 per cent, while two-bed flats to rent fell 5.9 per cent compared with last year.
* One and two-bed flats to rent in Edinburgh fell on average by 4.6 per cent and 7.7 per cent respectively.
* Glasgow was not as badly affected, with rents for one beds falling by 0.6 per cent and two beds 2.6 per cent.
Thomas added: "A return to stability would be welcomed by landlords. However, at this time, the average time to let is well over one month and longer than a year ago.
"As such, landlords should continue to adjust to market conditions, have patience and accept the increased probability of voids. Additionally, given that a property lying empty for just a single week is on average £160 lost revenue, they should avoid the temptation to rely on the free sites if time is of the essence. Free sites can in fact end up being very expensive."
He concluded: "If a landlord or their agent is using Citylets as part of their marketing mix, then that's a major box ticked - we have a combined annual audience of millions of Scottish property renters."
A copy of the report is available online at www.citylets.co.uk/reports/