Edinburgh rents fall with ‘reluctant landlords’

THE cost of renting a home in Edinburgh is falling compared to Glasgow, because the capital is being flooded by “reluctant landlords”, who have been unable to sell their properties.

The cost of renting a flat in Glasgow rose in the first quarter of the year with the average price reaching £764 a month, up from £701 towards the end of 2011, according to research by letting agency, DJ Alexander.

That is in sharp contrast to Edinburgh where there is a growing supply of rental properties becoming available, thanks to owner-occupiers who have failed to sell their properties and have decided to let them out until the home ownership market starts to recover.

DJ Alexander’s Rental Tracker shows that the average cost in the capital, in the first quarter of the year, was £796, compared to £813 for the final quarter of 2011.

Neil Thomson, manager at the Glasgow office of DJ Alexander, said: “We had a very successful January and February, with more properties let in these two months than the corresponding time last year. March was better than last year as well.

“Although I have noticed an increase in the number of people coming to us with properties to let, which is generally expected at this time of year as people ‘dust off’ for the spring market.

“Rentals have generally been increasing in Glasgow and that is obviously reflected in the figures.”

Rob Trotter, senior property manager for DJ Alexander, added: “It’s not a huge decrease but it shows that there is no shortage of properties currently available on the market and that as a result landlords need to be realistic in their level of rental expectations and the length of time it takes to find a new occupier for a flat or house that has recently been vacated.”

Mr Trotter identified two principal reasons for the dip in rentals, one of them being that, traditionally, there had always been an increase in the number of properties being made available towards the end of the first quarter of any year, as some landlords made available previously “dormant” flats for the spring market.

He added: “However, another major factor is what’s become known as the ‘reluctant landlord’. This is the term for owner-occupiers who have failed to find a buyer – or more likely pay the price demanded – and so, rather than sell for less than they think their property is worth, have moved on and made their property available for rent.

The Tracker shows the average price of a newly-let one-bedroom flat in Edinburgh has risen from £606 a month in the previous quarter to just under £619.

However, renting a two-bedroom flat – the most popular rental property type – went down from £788 to £742. The average rental cost of houses went down even further – from £1,333 to £1,211 a month.

At present, five per cent of households in Scotland are in the private rented sector while 1.5 million are owner-occupiers.

Gavin Corbett, policy manager for Shelter Scotland, said: “If rents are falling as a result of increased competition it can only be a good thing.

“But we must not forget that rents are still very expensive in the capital and that very few tenants have the correct information to make the right choices.”