Warnings of ‘unprecedented pressure’ on rental market leading to exodus of owners
Monthly rent in the Scottish rental market rose by an average of 5.2% to £869, according to Citylets.
The rental platform claimed the Scottish private rental sector (PRS) was under “unprecedented pressure” with demand outstripping supply across the country and sending prices to record highs.
A new report has warned that a range of other events could trigger greater turbulence and increase pressure on tenants.
The figures, covering the final quarter of 2021, show available properties snapped up at record speeds, with 40% of properties rented within a week and 83% taking less than a month to let.
Today, many owners are considering selling when the market is buoyant, in an effort to avoid a wave of increased regulation that is expected.
The trend was the same for one-, two-, three- and four-bedroom rental homes, all seeing significant increases in average monthly rent. Four-bed properties saw the biggest increase over a five-year period, with rents up 24.2%.
Increased competition for properties of all sizes also meant that rental homes were on the market for much shorter periods. Citylets said the average rental time (TTL) was only 16-19 days for all property sizes.
The changes were recorded across Scotland, with Glasgow, Edinburgh and Dundee all posting significant rent increases and TTL drops.
In Aberdeen, rents rose slightly overall, with increases particularly in larger properties.
Citylets said low inventory levels across Scotland meant the balance between supply and demand was currently unfavorable to tenants in many areas. This situation has been exacerbated by a later than usual student season, which has increased the pressure on the supply of larger properties.
Thomas Ashdown, managing director of Citylets, explained that the number of advertised available properties had fallen by two-thirds in the same period three years earlier.
“High levels of rental activity continued through to the end of 2021, causing stock levels to fall to record lows across Scotland,” he said. “Competition for rental properties was frenzied in many places – average inventory levels during the fourth quarter of 2021 were only 32% compared to the same quarter in 2018.”
Brian Gilmour, manager of independent Glasgow lettings agent Indigo Square, said: “The biggest issue affecting Glasgow’s rental market has been the availability of inventory.
“Rising house prices have allowed many owners to cash in and profit from their properties, but these sold properties have not been replaced in sufficient numbers and we have seen a decrease in PRS.
“This shortage has been compounded by the impact of Covid and the lack of people moving in, as well as restrictions on evictions limiting landlords’ abilities to move tenants.”
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