The latest quarterly report on the Scottish rental market by Citylets, for the third quarter of 2018, has found that rent are rising steadily across the country.

Scotland
The Scottish Private Rented Sector (PRS) recorded another annual rise during Q3 2018 with rents up 2.2% to stand at £789 per month on average. Continued demand for properties of all sizes pushed rents higher.

As in the previous two quarters of 2018, 4-bed properties recorded the steepest annual growth at 5.5%. The average Time To Let (TTL) for a rental property averaged one month (31 days) in Q3, which was one day quicker than the same period in 2017. A significant 61% of all properties are let within one month in Scotland at the moment.

Commentating on the latest report, Gillian Semmler, communications manager at Citylets said: “Strong demand for rented accommodation in Scotland continued in Q3 2018, most notably in the central belt where both Edinburgh and Glasgow experienced rental growth in excess of recent quarters. The continued demographic shift towards families renting appears evident in the uplift in rents achieved for larger properties.”

Edinburgh
Once again rents in Edinburgh rose during Q3 2018 bringing the average rent to yet another all-time high of £1,107 per month on average, up 5.6% year-on-year. All property sizes recorded strong annual growth with 4-bed properties rising fastest over the year at 10.8%, in part likely reflecting the continued strong demand for family rental accommodation. Of concern to tenants will be the uptick in the rate of growth for Edinburgh back to the 5-6% range after lying in the 3-4% range for around a year prior to Q2 2018. It is the 36th consecutive quarterly recording of annualised rental growth for the capital. TTLs remain very low in Edinburgh with 76% of all properties to rent in Edinburgh let within a month.

Glasgow
Glasgow, for so long the bastion of rental stability in Scotland with consistent and low annual growth, posted an unexpected and sharp annual rise in average rents of 4.9%. Rental properties in Glasgow now rent at £785 per month and let in just 24 days. It is unclear why all markets saw large annualised growth over and above what would normally be expected in the traditionally busiest period of the year.

Aberdeen
Aberdeen landlords can remain cautiously optimistic that their market may soon level-off completely and, with the price of oil having been on an upward trend for nearly three years, the city may soon start to return to positive growth. However, annual rental growth in Aberdeen during Q3 was down by 3.6%, compared to Q3 2017, with 1-bed properties posting a 2.7% fall for the second consecutive quarter. Of interest to landlords will be the reduction in average TTLs, down by four days on the previous year to 45 days, with 42% of properties in Aberdeen let within a month, up from 37% in Q3 of 2017.

Dundee/West Lothian/South Lanarkshire/Renfrewshire
Dundee also experienced a rise in the annual growth rate for its rental market, up 3.4% to an average of £604 per month. Strong demand for large family and student homes led the rises at 11% and 7.9% respectively. Nearly half (48%) of properties to rent in Dundee are let within a month, up significantly on recent quarters. The West Lothian rental market has again posted strong annual growth, up 4.8% to £697 per month, with a significant reduction in TTL of nine days. Growth in South Lanarkshire continued for the fourth consecutive quarter, albeit easing to 1.9% from 3.8% last quarter.

Commenting on the Scottish rental market, Adrian Sangster at estate agency Aberdein Considine, said: “In the north of Scotland we are continuing to experience a market where stock is not an issue, whilst in the south there is insufficient availability of properties to meet tenant demand. This is resulting in the almost evitable increase of rent values in the south compared to the continued reduction in the north, albeit at a much slower pace.

“Whilst there are some encouraging sounds from the oil industry, with several new projects being announced, I do not anticipate it making too much of an impact in the north of Scotland in the short to medium term. However, whilst the country’s legislators seem hell-bent on discouraging landlords to remain in the sector I can only see the rental trends in the south of Scotland continuing unabated.”

Regarding the Aberdeen property market, the estate agency, which has 19 offices across Scotland and the north of England, says the city is set to benefit from an oil industry jobs boost similar to the one which saw house prices soar in Aberdeen the 1990s. The firm says that buyers were returning to the market to take advantage of lower prices and that a skills shortage in the oil industry means a new influx of workers is in the pipeline.