Tenants in Edinburgh are paying the highest private rents in Scotland after strong demand sent costs in the capital soaring.
Edinburgh has now overtaken Aberdeen for the first time in more than a year as the most expensive place to rent in Scotland, according to research out today.
The latest rental report from Citylets, the lettings website, shows the capital’s West End area as the most expensive area in Scotland to rent, with the average two bedroom home costing £972 a month. Two-bed properties in the West End of Aberdeen, the priciest area a year ago, now rent at an average of £949.
Five of the ten most expensive areas to rent in Scotland are in Edinburgh. New Town – at £924 a month for a two-bed home – the Grange (£902 a month) and Murrayfield (£804 a month) also feature after rent increases in recent months. The average rent in the Murrayfield area has soared by 11.8 per cent over the past year.
The latest rise in rents reflects the continuing difficulty facing first-time buyers trying to secure a foothold on the property ladder, with tight mortgage conditions forcing tenants to rent for longer.
Dan Cookson, senior analyst at Citylets, said: “It’s no surprise Edinburgh has finally taken the top spot from Aberdeen. Five out of ten areas in the top ten list are in Edinburgh which shows the market in the capital is continuing to flourish with a good mix of properties available for the both student and professionals markets.
While Edinburgh and Aberdeen account for all of the ten most expensive places to rent, Glasgow dominates the table of the cheapest. Tenants in two-bed properties in Govan and Ibrox are paying £439 a month on average. Away from Glasgow, Kirkcaldy and Falkirk are also among the least expensive areas to rent.
Cookson said: “It is encouraging we are still seeing value for money in Glasgow and areas such as Irvine and East Kilbride, with many offering rents which appeal to a variety of different tastes.”
Rental prices are expected to continue rising in 2013 as mortgage conditions remain difficult and more people opt to rent for longer. Legislation introduced in 2012 could fuel sharp rental increases over the coming months, widening the gap between social and private rents.
The Scottish tenancy deposit scheme, which took effect last summer, is likely to add to the costs facing landlords, who are expected to pass the added overheads on to tenants in the form of higher rents.
That could be exacerbated by a Scottish Government crackdown on the upfront fees that tenants can be charged. David Alexander, owner of DJ Alexander letting and estate agency, warned last week that higher rents could prove damaging. “People need to have a roof over their heads and if they cannot get a mortgage where else are they to go? Let’s hope the rental market does not experience a ‘bubble’ similar to the one that afflicted home ownership before 2007 and then take a decade to recover,” he said.
However the rental market outside Scotland’s cities is “inactive”, a report claimed last month.. More than three quarters of lettings are concentrated in just 25 per cent of the UK, said Hometrack, and cities were the only areas north of the Border considered active. The rest of Scotland’s rental market is inactive, it said, with low rental demand and long void periods for landlords.