Landlords and property investors are now being advised that despite healthy demand, continued soaring levels of rental stock fuelled by home movers being forced to let their unsold properties will see rents inevitably face more downward pressure and an increased risk of void periods.
The latest Citylets quarterly report, which covers the period January to March 2009, revealed that average rents in Scotland decreased year-on-year by 1.1% to £638. Edinburgh saw the most widespread change with 1 & 2 bed flats in the capital recording their first annual declines since Citylets started recording data in 2003, down 1.1% and 1.9% respectively. The city on the whole was 2.6% down on last quarter to average £732 with Glasgow down 0.7% to £560 and Aberdeen virtually unchanged at £860.
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The largest sectors of the market, 1 & 2 bed flats, saw the biggest falls in rent with larger properties remaining steady - an indicator perhaps to the greater interest in flat-sharing and an early start to the seasonal student market.
Across the country, the greater choice of rental property available to tenants has also had a dramatic effect on time-to-let averages which have lengthened considerably.
Citylets quarterly report is the country's only detailed and independent barometer of the rental market, based on 40,000 annual lettings through over 250 agents. It is now a respected tool among investors, landlords and letting agencies.
Thomas Ashdown, Managing Director of Citylets, said it had been an interesting few months but on the whole the sector had held up relatively well.
He said: "I think rents, whilst down slightly pretty much across the board, have done well given the abundance of supply we have seen come onto the market from would be sellers in some areas. However I believe the real impact of that may yet to be felt in the months ahead.
"Many landlords may be encouraged to find that the year-on-year falls in rent are currently very modest when measured against significant falls in many buy to let
mortgage rates over the same period."
Mr Ashdown said landlords need to appreciate that one and two bed properties in Edinburgh are taking around 50% longer to rent and 33% longer in Glasgow than they were over the same period last year which is a significant change.
(GK/JM)
