Property concern

Shortage of homes pushes rents to record levels

rent property to let
Property is in short supply (pic: Terry Murden)

A shortage of private rental property is forcing up rents to record levels and adding to the cost of living crisis, according to new figures.

A report from lettings portal Citylets shows that for the final quarter of 2021 the average monthly rent across the country rose by 5.2% to £869.

The lack of available properties means they are being snapped up at record speeds, with 40% of properties let within one week and 83% taking less than a month to let.

There are concerns that rising property prices, together with new regulations expected in the private rental sector, will persuade many landlords to sell – further reducing the available stock of properties.

Thomas Ashdown, managing director of Citylets, said the numbers of available properties being advertised was down two-thirds on the same period three years earlier.

He added: “High levels of rental activity continued to the end of 2021, sending stock levels down to record lows across Scotland. Competition for property to rent was frenzied in many locations. The average  stock levels over Q4 2021 were just 32% compared to the same quarter in 2018.”

Gillian Semmler, public relations manager at Citylets, added: “It may have been the festive period during Q4 but it was challenging to find anything to cheer. 

“Even pre-Omicron, supply of rental properties was stymied in the face of increased anxiety around the deteriorating quality of life due to the cost of living, and worries over access to basic commodities such as fuel. It wasn’t perhaps the best time to make a house move.”

The pattern was the same across all sizes of homes to rent – with four bed properties seeing the greatest rise in rents across a five-year period – up by 24.2%.

Increased competition for properties of all sizes also meant rental homes were on the market for much shorter times. The Citylets report showed that Time to Let (TTL) averaged just 16-19 days across all property sizes.

Problems were exacerbated by a later than usual student season adding further pressure to supply of  larger properties.

Meanwhile, letting agents are concerned that a further shake-up in the market is likely to drive out many landlords, creating further pressure. In December, the Scottish Government opened its latest consultation on the sector, A New Deal for Tenants – Draft Rented Sector Strategy, which seeks to improve accessibility, affordability and standards.

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However, many small-scale landlords fear that it will herald a double whammy of greater regulatory burdens and lower profits – prompting many to consider selling up.

Brian Gilmour, of independent Glasgow letting agent Indigo Square, said: “The biggest issue affecting the Glasgow rental market has been availability of stock. House price rises have allowed many landlords to ‘cash-in’ and take profit out of their properties. However, the properties being sold have not been replaced in sufficient numbers and we have seen a shrinkage in the PRS. 

“This shortage has been compounded by the impact of Covid and the lack of people moving, plus restrictions on evictions limiting abilities of landlords to move on tenants.”

Callum MacGregor, new business director at Braemore, said the Edinburgh property market was also affected by a “severe lack of stock” for most of 2021.

He added: “We are still craving new landlords to meet this huge demand from potential tenants. Rents are up and the standard of tenant is superb so it’s easy to see why investors still see Edinburgh as such a strong market.”

Eilidh Finlayson of Dundee property management company Finlayson Gore, said the city was also in the grip of a supercharged market.  She said: “We have also experienced a strong trend of tenants looking for more rural properties with a huge premium on outside space and home working possibilities.”

In Aberdeen, Adrian Sangster, leasing director at Aberdein Considine, said: “Unless there is a dramatic change, low availability of stock will remain the biggest challenge for those looking for a home in the area.”

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