'Generation rent' puts Capital flat prices in class of their own

PROPERTY rental prices across the Capital are continuing to grow with the so-called "generation rent" tenants helping to fuel the boom.

The latest figures, which were revealed in Citylets' quarterly data report from April to June this year, showed that the cost of renting in the city was slightly higher than the national average.

The average rent in Edinburgh has risen by 1.9 per cent to 769 over the last year, while the average rent across the country for the same period increased by 1.4 per cent to 663 - its highest level since the third quarter of 2008.

Market analyst for Citylets, Dan Cookson, said: "There has been a general shift to the private renting sector because of the credit crunch.

"For those who want to buy a house, the deposit requirements are higher and you have to save more money for longer, so a lot more people are choosing or having to rent. The rental prices haven't jumped up because there has been an increase in the supply to meet the demand.

"I think the positive thing is that it's not increasing dramatically - it's still affordable. The supply is increasing and the quality of properties is probably increasing as well.

"The only problem will come if the supply of rental properties doesn't meet that growing demand.

"There is potential there for that to happen if landlords are not able to expand their portfolios. Medium to long-term, there could be pressures on supply."

According to the statistics, Edinburgh and Glasgow were the best performing cities in Scotland, with rents rising across all property sizes. In the Capital, the average rent for a one-bedroom flat now stands at 537, a rise of 3.3 per cent on the same period last year, while a three-bedroom property costs an average of 1002 each month to rent - an increase of 1.7 per cent. The average rent for a two-bed flat in the city has risen by 2.6 per cent to 698.

Experts said the rental market across Edinburgh and the rest of Scotland was continuing to strengthen due to the reluctance of the new "generation rent" tenants to purchase homes of their own.Mr Cookson said: "This 'generation rent' attitude is creating an ongoing boom in the lettings sector, with rented homes proving popular across the whole country.

"There is still high competition for good quality homes, and this is being reflected in the fact that rents are rising and the time taken for properties to let is falling."

The statistics also listed The Grange as the most expensive area to rent in Edinburgh, with the average monthly rent for a two-bed flat in the area costing 970.

Stockbridge topped the list of the top five areas with the shortest time to let in Edinburgh, with a two-bedroom flat taking just 22 days to rent.

Director of Murray and Currie in Edinburgh, Steven Currie, said the estate and letting agency's average time to let was within two weeks.

"Within five to ten working days, properties in Edinburgh are getting let," he said. "We are seeing lease terms getting bigger with more people now asking for 12-month or even 24-month leases."

The Citylets report also revealed that the smaller properties of one or two bedrooms accounted for more than 70 per cent of the total number of lets within the city.

Mr Cookson added: "The trend over the last two years is certainly upwards and we are now in the busiest quarter for Edinburgh and nationally, so I would be surprised if rent prices didn't continue to go up."