Aberdeen rents toil under oil price pressure but nationwide upward trend continues
The latest report from leading Scottish lettings portal Citylets shows rents in the Scottish private renting sector continued their upward climb during the second quarter of 2015, despite drag from Aberdeen.
Average rents stood at an all time high of £762, up 5.4 per cent on the year, with properties taking just 1 month to rent.
Annual growth, however, slowed from 7.4 per cent in the last quarter.
Aberdeen rents, still the highest of all Scotland’s key cities, fell from £1089 in Q2 to average £1043, as fall-out from reduced oil and gas sector activity continues to bite.
Whilst annual decreases were recorded only for the larger 3 & 4 bed properties last quarter, all property sizes (1-4 beds) now saw rents fall contributing to citywide negative annual growth of 3.8 per cent.
Larger properties fell hardest, down 11.2 per cent and 7.6 per cent for 3 & 4 beds respectively but the more popular 1 & 2 beds now also eased down 0.3 per cent to £680 and 2.7 per cent to £989.
With large volumes of student properties due to come on stream and with time to lets (TTLs) still rising, it is expected the Aberdeen market will continue to fall and may lose its ‘most expensive’ tag to Edinburgh where rents rose once again this quarter to stand at £923 per month, up 7.3% on last year and part of a long standing upward trend stretching more than 2 years.
Commenting on the findings, Thomas Ashdown, founder of Citylets said: “With the Scottish Government currently consulting on matters central to the new Tenancy regime, including localised rent controls, it is highly noteworthy to report that Aberdeen has just recorded negative annual growth for the first time in years.”
“This will be music to the ears of those supporting free market economics. Aberdeen has often been cited by those in support of controls as evidence for intervention but now I believe the city best highlights the ability of markets to self regulate.”
“Surveys and academic analysis suggest increased regulation and decreased control for landlords will reduce supply. Whilst large swathes of the country continue to enjoy a balanced market, local (city) hotspots continue to suffer from a dearth in supply and can ill afford to see it further compromised in any way.”
“With the removal of ‘no fault’ grounds for repossession already confirmed, one must hope that common sense will prevail to ensure a new granular system to provide for the niche student market which depends on a fixed end date culture. This is particularly so for Edinburgh where it fits hand in glove with the need for short term Festival accommodation.”
Glasgow also saw growth of 4.4 per cent for the year to £685 per month but down from 8.1 per cent annual growth recorded as at the end of Q1. The market in Scotland’s largest city continues to move well with a typical property letting in just 25 days on average and with 68% of properties let within the month.
Dundee, meanwhile, also enjoyed positive growth of 7 per cent to average £600, with marked gains for 3 and 4 bed properties though heavily influenced by the seasonal rush for large student property.