Thursday, 9 August 2012
Rents in Scotland rise by almost six percent in the last year
The cost of renting a home in Scotland has risen by nearly six percent in the last year as many would-be buyers continue to find themselves locked out of the sales market, says the latest RICS Scotland residential lettings survey (May–July 2012).
[Pictured: Sarah Speirs, Director of RICS Scotland.]
The cost of renting a property has grown by 5.9 percent over the last twelve months, according to chartered surveyors across Scotland. Given the problems affecting the sales market, perhaps unsurprisingly, this trend looks set to continue as respondents also predict rents to continue to grow by almost five percent (4.8) over the next year.
The upward march in rents in Scotland continues to be underpinned by a shortage of good quality properties for tenants to move into. In the three months to July, the amount of new properties coming on to the market was little changed compared with the preceding period.
Meanwhile, demand continues to grow in Scotland, albeit at a much slower pace than in recent quarters, as eight percent more respondents reported rises rather than falls in interest from potential tenants (from +25 percent). Evidence of increased demand outpacing the change in supply for the second consecutive month this year can be seen across Scotland.
John Gell MRICS, Member of RICS Scotland Residential Professional Group Board and Director of SimplyLet in Inverness, said: “In spite of new instructions strong demand is exceeding supply, particularly for quality city-centre properties. The combined effect of tenants staying longer, and a vibrant local economy continuing to attract new people to the area, is putting pressure on housing stock.”
Across the UK as a whole, strong regional variations were apparent. The North West of England saw rents increase by the biggest margin with values growing by 6.9 percent, whereas surveyors in Wales reported that rents had in fact stayed at the same level over the last twelve months.
Unsurprisingly, with rental values steadily increasing in Scotland, gross yields have continued to edge upwards during the early part of the year, which has contributed to fewer landlords (one percent) opting to sell their properties at the end of the tenancy.
Sarah Speirs, Director of RICS Scotland, commented: “It is interesting to see that the huge growth we have seen in demand in recent years has started to gradually slow. While tenant interest is still riding high, what remains to be seen is whether many are willing to meet the increasing rents being demanded by landlords.
“However, it is clear that we have seen rents grow steadily right across Scotland for some time. This is partly down to the problem of the scarcity of mortgage finance and the large deposits required by lenders. These barriers to home ownership need to be addressed alongside the shortage of new stock coming to the market.”
The RICS Residential Lettings Survey began in 1998. This quarterly survey provides a comprehensive picture of the lettings market across England, Wales and Scotland as well as a regional breakdown.
The survey includes trends in tenant demand, gross yields, and rent expectations broken down by region and property type.
RICS is the world’s leading qualification when it comes to professional standards in land, property and construction.
In a world where more and more people, governments, banks and commercial organisations demand greater certainty of professional standards and ethics, attaining RICS status is the recognised mark of property professionalism.
Over 100,000 property professionals working in the major established and emerging economies of the world have already recognised the importance of securing RICS status by becoming members.
RICS is an independent professional body originally established in the UK by Royal Charter. Since 1868, RICS has been committed to setting and upholding the highest standards of excellence and integrity – providing impartial, authoritative advice on key issues affecting businesses and society.
RICS is a regulator of both its individual members and firms enabling it to maintain the highest standards and providing the basis for unparalleled client confidence in the sector.