Urban Rents Jump Upwards!

The 25th issue of the quarterly report from Citylets – Scotland’s leading lettings portal – shows that in the first quarter of 2013 average monthly rents in Scotland rose by 1.7% over the year. While this slight increase in rents does not match the Consumer Price Index (CPI) measure of inflation (2.8%), landlords will at least be pleased that there was an increase.  In the same period, Registers of Scotland recently reported that average sale prices for flats in Scotland were down by 1.7% which indicates a general improvement in rental yields.

Analysis of gross rental yields (GRY) in Q4 2012 shows that the three local authorities with the cheapest flat purchase prices have the highest GRYs of above 8%: North Lanarkshire 8.8%, Renfrewshire 8.6%, and Falkirk 8.5% – in Edinburgh, a typical 2 bedroom flat achieves rental income of nearly £9,000 per annum but with a higher average purchase price this drives down typical GRY to 5%.

The major Scottish cities all saw larger rises in rents than the Scotland figure with Edinburgh up 3.7% at £817 and Aberdeen up 5.3% at £961, which sets a new high for the city which is now 42% more expensive than the Scottish average. Glasgow saw average rents increase by 2.9% to £613 while Dundee, the cheapest city in Scotland to rent, saw growth of 3.2% to £572.

Dan Cookson, senior analyst with Citylets, said:  “We’re seeing continued, moderate growth in rents at the national level, though within the cities rents have increased more significantly.  Renting is firmly established as a lifestyle choice now, rather than just something to do while you save up to buy a property of your own, and many tenants are happy to chose renting whilst the sales market remains flat.

“The Private Rented Sector has performed well over the last year and coped with an increase in regulation such as the introduction of tenant deposit schemes and the banning of letting agents charging fees to tenants.  With the housing sales market still flatlining,  many tenants are delaying their step onto the property owning ladder in the knowledge that they are not missing out on house price appreciation.

“Two and three bed properties in Edinburgh saw increase in rents with two bed properties now standing at £730, a 1.3% rise on last year. Three bed properties increased by 6.5% to bring rents to an average of £1,100 in the capital.

“Time to let figures were also shorter in Edinburgh with the average property taking 29 days to let, an improvement of eight days from last year.

www.citylets.co.uk was launched in 1999 and is now the UK’s No1 residential letting portal. Its quarterly Scottish reports are the country’s only detailed and independent barometer of the rental market, based on over 50,000 annual lettings from more than 400 agents. It is now a respected tool among investors, landlords and letting agencies.  The report is available to view at www.citylets.co.uk/reports

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