Rents Soar in Edinburgh and Aberdeen

heathcote123

http://news.scotsman.com/mortgageandpropertynews/Rents-soar-as-Scottish-homeseekers.6830494.jp

Published Date: 04 September 2011

THE cost of renting in Scotland has soared over the past year as more homeseekers put off buying a property of their own.
Experts claim difficulties in obtaining mortgages from banks and taking the first step on to the housing ladder have created "Generation Rent" - a group of people who do not want to buy their own home but opt to rent instead, living in more expensive
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flats than they would be able to own.

According to new figures from Citylets, the price to rent a two-bedroom flat in The Grange in Edinburgh - the most expensive area to rent in Scotland - rocketed from £856 a month in the second quarter of 2010 to £970 in the same period this year.

Similarly, Aberdeen's West End - second on the list of most expensive rental areas for a property of the same size - rose from £903 to £954, and Edinburgh's West End shot up by £120 a month from £813 to £933. In Glasgow, the cost of an average flat in the Park & Woodlands district in the city's West End also rose but only marginally, from £828 last year to £831.

These guys obviously didnt check in with LSL property services.

nearlynew

If only McTittish had some money to buy a BTL.

He'd be loaded now.

TruckerT

The inflation of the house purchase market was generated by stupidly easy money-to-buy (prices followed mortgage availability, and vice versa)

The boom in the rental market has been generated largely by the collapse in the purchase market - it remains to be seen how far it will go, but it would be nice to think that those-who-know-about-these-things will not be caught out a second time...

But the law of supply and demand still applies - Edinburgh/Aberdeen/London etc will always be honeypots - nobody has to live there

TruckerT

geneer

heathcote123 wrote: »

http://news.scotsman.com/mortgageandpropertynews/Rents-soar-as-Scottish-homeseekers.6830494.jp



These guys obviously didnt check in with LSL property services.

Whoops. Looks like this guy didn't check in with Citylets. :rotfl:
http://www.citylets.co.uk/reports/pdf/Citylets-Rental-Report-Q2-11.pdf?ref=reports
Aberdeen 2 bedder. A paltry YOY change of 1.3%.
Aberdeen 3 bedder, ouch, a fall of -1.6%.

Edinburgh 2 bedder, a 2.6% increase.
Edinburgh 3 bedder, a weency 1.7% increase.

geneer

Can I ask a mod to change this threads title to something more accurate.

Perhaps

"Rents fail to keep up with UK increases in Edinburgh & Aberdeen"

or

"Real rents plummet in Edinburgh & Aberdeen".


Thanks for pointing this one out Heathcote.

robmatic

Interesting report by Citylets there. I wonder what they mean by this though?

Monthly statistics from Registers of Scotland show that the housing market has picked up slightly from the low seen in March of £142,000 to a May figure of £154,000. This upturn is invariably seen at this time of year as the volumes of sales begin to pick up. There is actually a strong correlation (0.75) between monthly sales volumes and the annual growth rate.

goosander

I recently did some sums to see if a BTL would be worthwhile in Edinburgh, and was somewhat surprised to see that typical rents don't seem to have increased all that much from when I last rented in Edinburgh in 2000, I'm pretty sure that rents are less in real terms than they were back then (property prices much higher though, even after recent falls).

Graham_Devon

What really is the excitement over rent going up?

I can understand for landlords, in a way, but can't understand for people who are not, just want hous prices to increase. But it just flashes up in lights how problematic the housing market is.

While rents may be going up, the actual asset worth is either stagnant in nominal terms, falling in nominal terms, and will definately be falling in inflation terms, falling worse than a standard internet savings account and you don't even have to pay maintainance on that.

All this "rents are increasing, whoop" stuff seems more to me about self comforting than any meaningful conversation or debate.

robmatic

Graham_Devon wrote: »

What really is the excitement over rent going up?

I can understand for landlords, in a way, but can't understand for people who are not, just want hous prices to increase. But it just flashes up in lights how problematic the housing market is.

While rents may be going up, the actual asset worth is either stagnant in nominal terms, falling in nominal terms, and will definately be falling in inflation terms, falling worse than a standard internet savings account and you don't even have to pay maintainance on that.

All this "rents are increasing, whoop" stuff seems more to me about self comforting than any meaningful conversation or debate.

To be fair, the only people getting excited are Hamish and Geneer who mostly like the wind-up.

Some people (me included) think that the only sensible measure of whether property is under- or overvalued is when viewed in relation to rent. From that perspective, the housing market in the early Noughties was clearly bubbling upwards in a way that can't be put down to the effects of supply and demand: house prices shot up but rents didn't, whereas if supply was truly constrained rents would have shot up as well.

So, in that sense, if house prices are static or falling in real terms and rents are rising either in nominal terms or in line with inflation, then we are seeing a welcome return to rationality in the housing market and this is worth discussing.

TruckerT

robmatic wrote: »

we are seeing a welcome return to rationality in the housing market and this is worth discussing.

if a return to rationality includes a return to rental for vast numbers of people, then we need to update the regulations surrounding tenancies - it is not really acceptable for large numbers of households to have to live from month to month, never knowing when they will have to move house

TruckerT

robmatic

TruckerT wrote: »

if a return to rationality includes a return to rental for vast numbers of people, then we need to update the regulations surrounding tenancies - it is not really acceptable for large numbers of households to have to live from month to month, never knowing when they will have to move house

TruckerT

I am not sure that the proportions will change hugely but we certainly do need better regulations for tenants and landlords.