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Cost of renting a home soars

Calls for more investment as rents rocket

Rob TrotterSoaring rents in Edinburgh and Glasgow have prompted new calls for more private tenanted homes to be made available.

The cost of renting a one-bedroom flat in Edinburgh has rocketed by 27.6% and in Glasgow by 22.5% over the past five years, according to latest figures. Two-bed flats have risen by 21% and 18.1% respectively.

In money terms, it means monthly rentals of one-bedroom flats have risen from £560 to £715 in Edinburgh and from £509 to £624 in Glasgow; for two-bedroom flats the figures have been from £735 to £893 (Edinburgh) and from £783 to £925 (Glasgow).

The figures mean that since DJ Alexander launched its quarterly Rental Tracker almost five years ago, the cost of renting a one-bedroom flat in Edinburgh now costs £1860 a year more than in spring, 2010.

Now Rob Trotter (pictured), business development manager at DJ Alexander, has called for more individuals to invest in rented properties as well as a greater involvement in building and refurbishing homes for rent by financial institutions.

He said: “Rental costs are still within reach of most tenants in regular employment but our Tracker has recorded a rising graph in the cost of renting (with a few blips along the way) over a five-year period and the market just will not have the supply to cope with the level of demand for very much longer.

“Even now, most well-located properties are renting within days rather than weeks. Only those in undesirable locations, or which could do with upgrading or refurbishment, are sticking for any length of time.”

Mr Trotter said the rental stock could be increased through more ‘buy to let’ purchases by private citizens or larger development schemes financed by banks, insurance companies and pension funds.

“It is essential that the market is in a position to meet the growing demand from young single people and recently-married couples who are finding difficulty raising the deposit on a mortgage or are simply drawn to renting as a lifestyle choice.

“As for the effect on rents, these might not fall, at least initially, but they certainly would not rise to the extent they have done over the past five years if more units were to become available.”

David Mooney, regional manager, West of Scotland, for DJ Alexander, said: “The rental increases seen in Glasgow over the past five years have been quite remarkable. However they can easily be attributed to a combination of factors, including earlier rental rates having been relatively low, people’s changing perception of rented property following the house-price crash, lack of mortgage funding and the average age of a first time buyer increasing to 30, according to the Halifax.”

Average flat rentals based on new leases, 1 December to 28 February

 

EDINBURGH

One-bed         Two-bed           Three-bed           Four-bed     Five-bed

£715                 £893                   £1270                 £1801           £1900

Overall average: £914

 

GLASGOW

One-bed   Two-bed               Three-bed       Four-bed

£624          £925                    £1150               £1350

Overall average: £762

 

*Figures based on 382 leases signed during the period.

 

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