Scottish landlords see rents fall amid glut of properties to let

Private sector rents are falling throughout Scotland according to research by Citylets, an online letting portal.

Levels of rental stock are rising as more home movers are forced to let their unsold properties. This is causing rents to drop, despite high demand, and increasing the likelihood of void periods for landlords.

The latest Citylets quarterly report, covering January to March 2009, shows that average rents in Scotland have decreased by 1.1 percent to £638.

Edinburgh saw the most widespread change, with one and two bed flats down 1.1 percent and 1.9 percent respectively. These are the first annual declines in the capital since Citylets started recording data in 2003.

Edinburgh was 2.6 percent down on last quarter with an average rent of £732, Glasgow was down 0.7 percent to £560, and Aberdeen remained virtually unchanged at £860.

One and two bed flats - the largest sector of the rental market - saw the biggest rent falls, while larger properties remained steady. Citylets says that this perhaps indicates a greater interest in flat sharing and an early start to the seasonal student market.

With a greater choice of rental properties available, time-to-let averages have increased dramatically.

Thomas Ashdown, MD of Citylets, said: “I think rents, whilst down slightly pretty much across the board, have done well given the abundance of supply we have seen come onto the market from would-be sellers in some areas.

“However, landlords need to appreciate that one and two bed properties in Edinburgh are taking around 50 percent longer to rent, and 33 percent longer in Glasgow, than they were over the same period last year.“Void periods are much more likely, and patience in finding the next tenant may be required.

“It will be interesting to observe major conflicting forces affecting demand this year, availability of mortgage finance and rising unemployment. Whilst the sales market remains depressed, supply in Edinburgh in particular seems set to continue to rise, perhaps peaking towards the end of the year.

“As a result, I would expect greater choice for tenants to continue and hence downward pressure on rents.”Citylets was launched in Scotland in 1999 and now claims to facilitate more than 40,000 lets annually through over 250 agents.