The number of people renting private properties in Scotland has almost doubled in the past five years, it has been claimed, as “generation rent” emerges from a moribund housing market.
Not only are more Scots turning to the rental market because they are unable to buy or sell a home, but they are increasingly opting to rent for longer, according Citylets.
However, the latest report from the lettings website reveals that renting continues to become more expensive in Scotland. The average rent across Scotland reached £672 in the three months to the end of June, 1.4 per cent higher than the same period a year earlier. The cost of renting comfortably outstrips inflation in both Edinburgh and Aberdeen, where the biggest increases have been on family properties.
But the greatest demand continues to be from younger age groups unable to afford a deposit or mortgage and becoming resigned to renting for the long-term, said Dan Cookson, senior analyst at Citylets. “Increasingly, agents are telling us that larger numbers of people are choosing to rent a home for the foreseeable future, and that this is not a short-term commitment,” he said.
The report, based on more than 50,000 annual lettings, shows that the number processed through the service has almost doubled since the outset of 1998.
Cookson claimed rents are being kept down only because landlords are resisting the temptation to cash in on higher demand. But the increased supply of homes to let is the biggest factor preventing rents from soaring even higher. Rental properties in Scotland are taking longer to let now than earlier in the year, with the average time edging up to 39 days.
The exception is in Aberdeen, where tenants have seen average rents rise by 4.5 per over the last 12 months. Properties in the Granite City – where the average three-bed flat rental price has risen 8.1 per cent to £1,225 in the last year – now take just 21 days to let out, down from 32 a year ago.
In Glasgow, the typical two-bed rent is now £614 a month, up 2 per cent in the last year, while in Edinburgh the average two-bed rent has climbed 2.9 per cent to £718 a month. It takes 35 days to let out the average two-bed home in the capital, compared with 30 a year ago.
Rob Trotter, senior property manager at DJ Alexander, said the supply of private rental properties in the capital reflects unrealistic expectations among sellers, who are letting out rather than dropping their asking price.
“This additional supply has made lower rents more or less inevitable and while there are still plenty of tenants seeking accommodation, they do not have any shortage of choice.”
The estate agent reports similar trends to Citylets, with rents for first-time buyer properties in Edinburgh and Glasgow beginning to stabilise.
But a new factor has come into play that could accelerate the increase in rental prices. Scotland’s new tenant deposit scheme, which came into force earlier this month, requires deposits paid to landlords to be transferred to an approved scheme within 30 days of the tenancy starting.
Experts say the rules could add to the costs incurred by landlords, who in turn could pass the burden onto tenants in the form of higher rents.
Cookson said the scheme was one of several challenges facing Scotland’s rental market.
ONE IN THREE TO PAY INTO ISAS
One in three adults in Scotland plans to pay into a cash Isa during the current tax year – but many will keep their savings hidden from their family.
Up to 17 million UK adults – 35 per cent – intend to use some or all of their annual tax-free cash Isa allowance over the coming year, according to research out today from Santander.
Londoners are by far the most likely to pay into an Isa, with 45 per cent claiming they plan to use some or all of their annual allowance. In contrast, just a third of Scots expect to deposit cash into an Isa before next April. Of the savers who have taken out a cash Isa, 11 per cent revealed that their partner and/or family are in the dark as to the existence of the account or the amount of money held in it. The average secret savings account holds £3,648, a figure that jumps to £5,196 for savers aged over 55.