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Average monthly rents in Scotland pass £1,000 for the first time

The latest (Q1 2023) report on the Scottish residential property market by Citylets has revealed that the average national rent is now more than £1,000 per month. Average rents in Scotland rose 12.4% year-on-year (y-o-y) in the first quarter of 2023 to average £1,007 per month with properties taking just 21 days to let.

Aberdeen (£798) and Dundee (£835) are still well below that level but Glasgow (£1,105) is above it, and Edinburgh (£1,372) is considerably more expensive than anywhere else in Scotland.

Citylets stated: ‘Scotland’s PRS enjoyed relative calm in the first quarter of 2023 with some easing of pressure on landlords as mortgage rates drifted lower and the rent freeze was replaced with a 3% increase cap, with discretionary scope for up to 6%. However, material concerns for supply persist with industry consensus that recent legislation (the 3% rental price increase cap), however well intent, will increasingly exacerbate the root causes of the problem.

‘Many agents report a very frenetic and difficult experience for would-be tenants at the coalface. Fears of a vicious circle of low supply and rising open market rents seem well founded as tenants increasingly understand the gap between existing tenancy rents and new tenancies. The longer the cap remains in place, the wider the gap will grow further de-incentivising moves within the PRS and constraining supply.’

Now let’s look at the four big Scottish cities in more detail and hear from some local estate agents working in those cities.

Edinburgh – Rents up 13% in past 12 months (+29% in past 5 years)

The average Time to Let (TTL) in Edinburgh is 18 days (+2 days y-o-y) and 81% of newly listed properties are rented within a month.

Paula Russell at Aberdein Considine, says: “The start of 2023 has continued as 2022 left off and is still very busy with new landlords looking to add to their rental portfolios. Whilst stock levels remain low across the market, the demand for good quality properties is strong. Economic uncertainty, the energy crisis and energy performance are factors very much in tenants’ minds and will be decision making factors when shopping around for a property to rent. Overall, we continue to see high occupancy levels across the portfolio we manage and with tenant demand up, we are hopeful the supply chain will respond positively.”

Glasgow – Rents up 14% in past 12 months (+48% in past 5 years)

The average TTL in Glasgow is 17 days (+4 days y-o-y) and 80% of newly listed properties are rented within a month.

Cameron Haddow at Sandstone, comments: “There was little change to the market in Q1, with no improvement in the supply and demand shortage we saw at the tail end of last year. As a result of this, rents in our portfolio have seen double digit (percentage) growth. There continues to be a lack of properties becoming available, which means more tenants competing for a finite number of homes. This will be exacerbated further with the peak letting season for students on the horizon – I don’t foresee any let up in the coming weeks and months.”

Aberdeen – Rents up 10% in past 12 months (+8% in the past 5 years)

The average TTL in Aberdeen is 24 days (-13 days y-o-y) and 70% of newly listed properties are rented within a month.

Sarah Harley at Margaret Duffus Leasing states: “Rents are rising in Aberdeen and with some landlords looking to get out of the market due to their own rising costs, the pressure on tenants is going to continue. The rent freeze coming to an end in March will see a rise for a lot of existing tenants coming into effect by July, but the cap has meant that some tenants are not only forced to move but will pay a higher rent on the open market. Many properties are receiving several offers so landlords are looking for tenants to provide good references and a solid term credit history to be able to stand out from the crowd.”

Dundee – Rents up 16% in past 12 months (+36% in the past 5 years)

The average TTL in Dundee is 20 days (+4 days y-o-y) and 77% of newly listed properties are rented within a month.

Eilidh Finlayson at Finlayson Gore says: “Q1 of 2023 saw an unprecedented upsurge in the asking prices for rents in Dundee, directly influenced by a continued demand for good quality property outstripping available market supply. Competition between tenants is fierce and completed applications are being received ahead of viewings in an attempt by interested parties to secure tenancies ahead of others. We attribute this to existing tenants staying on in their rental properties and their reluctance to move on in an uncertain renters market.”

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