Uncertainty over growth
‘Uncharacteristic dip’ slows rental market
Property rental portal, Citylets, said there had been a cooling in rents in the final three months of 2016 against a two-year trend which has seen strong growth in Edinburgh and Glasgow overcome falling rentals in Aberdeen.
However a slight cooling in the rate of growth in the central belt at the end of the year impacted adversely on the national average.
Despite what Citylets described as an “uncharacteristic” dip, the company is forecasting overall growth in Scotland’s residential lettings market.
It is expected that Aberdeen will continue to fall throughout 2017 before bottoming out, while the rest of Scotland’s urban private rented sector grows, though there is some uncertainty over its ability to return to historically high levels of circa 7% growth.
Highlights of the Q4 report:
- Scottish average in private rented sector at £739 at end of 2016
- Edinburgh at £984 (Q3 2016: £1014) up 3.6% year-on-year, Glasgow up at £728 up 3.9% year-on-year, Aberdeen down 15.4% year-on-year at £790, Dundee best performing Scottish city up 4.7% year-on-year to £597
- Scotland-wide, 61% of all properties were let within a month for 2016, with an average time to let (TTL) of 31 days
- Edinburgh (21 days), then Glasgow (22 days) have lowest average TTL
Thomas Ashdown, managing director and founder of Citylets, said: “In 2017, the private rented sector is now of unprecedented importance in Scotland’s housing mix and, overall, we see continued positive growth in major urban areas with the exception of Aberdeen.
“However, the figures suggest that the rate of decline for Aberdeen has stabilised at the reduced level of circa minus 15%. This all indicates that rents in the city could start to level off and the worst of the boom/bust cycle is coming to an end.
“Average rents in Edinburgh fell back below their record £1,000 level recorded in Q3 and it is unclear if the circa 6-7% year on year growth can continue as it has over the last two years.
“Certainly tenants will take heart from these latest figures and landlords will likely agree that they can also live with them should they continue.”