Press Releases
Charles White Property Market Report
Date: 03-August-2005
OPTIMISM FOR EDINBURGH’S RESIDENTIAL RENTAL MARKET
Charles White Ltd, the residential property management and letting company, has reported a strong rental market over the last 12 months.
A report compiled by David Hutton, Operations Director, Charles White Ltd, which has over 160 years of experience in the field, states that recent activity in the Edinburgh residential rental market bodes well for both the city’s landlords and tenants.
Review of the market shows that it is has remained robust following an exceptional year in 2004, with a very active summer ‘04 resulting in a limited number of properties remaining available to let going in to the winter of 2004.
The report also reveals a strong demand for single bedroom properties, HMO (houses in multiple occupancy) licensed properties and an increase in interest from overseas nationals seeking work in Scotland.
The report states:
• The strength in demand over summer 2004 and the early part of the winter 2004/05 has caused rental prices to remain firm and rise in a number of cases.
• Many one bedroom properties in the affordable (£325 to £375) per month bracket have experienced an increase in demand enabling rental figures to rise by as much as 10%.
• There has been strong demand for larger 3-5 bedroom properties with HMO (houses in multiple occupancy) licences. This has been partly driven by a shortage of suitable properties available for groups of students who wish to rent and share a property together.
• 3 bedroom properties which were previously achieving rents of £650 to £700 are now typically realising £825 to £875 per month, representing an upsurge in rental income of over 30%.
• Many landlords who have applied for and obtained HMO licenses are reaping the benefits. Although obtaining the licence generally involves some capital investment and an ongoing registration charge the rise in demand from students has opened the door to opportunities for increased rental income streams for the landlord/investor.
• A new demand has emerged in the last 12 months from foreign nationals, particularly Eastern Europeans, seeking to rent affordable 1 & 2 bedroom properties in Edinburgh.
Landlords can expect to enjoy solid and secure return on their investment as long as they can provide properties demanded by the market.
• The strength of the buy to let market has provided an increase in the supply of rental properties creating more choice for tenants.
• Competition between landlords has increased due to the wider choice available to tenants; as a result many landlords have invested in their properties to attract and retain valuable tenants. The increased investment has had a significant impact on the quality of properties available and creates a challenge for both landlords and their agents who are attempting to market a property which requires some investment in the décor, carpets, flooring and fittings etc.
• Supply of properties in the traditional letting areas of Marchmont, Bruntsfield, Morningside, Stockbridge, Newington and Polwarth remain healthy although some landlords have decided to take advantage of the strong housing capital market by cashing in on their investments.
• The supply of properties in areas such as Gorgie, Dalry and Leith, where landlords have been able to purchase properties at lower capital values, has improved. Affordable one bedroom flats priced correctly have a market in these areas, however unrealistic rental expectations by landlords have had an impact on void periods.
And the capital’s student population?
David added: “Students often get bad press in the residential letting market but our research and experience shows a more positive view of students as tenants.”
“The student market is an essential part of the Edinburgh letting scene and local economy. Where permitted by a mortgage provider, landlords should be more open to consider the student market when letting their properties.”
Looking ahead for the remainder of 2005 and into 2006, the market looks strong and should provide rental tenants with a choice in good quality properties. Good opportunities exist for landlords providing they can continue to meet growing tenant demands and expectations.
David offered the following advice to landlords: “As a result of the enactment of the Antisocial Behaviour Scotland Act 2004 landlords should be aware that they will soon be required to register their let properties with the local council. The initial target to introduce the new legislation was November 2005, however, it is now more likely that this will not happen before early summer 2006.
“The landlord and tenant market is becoming more sophisticated and with the legislation involved, including HMO licensing and the forthcoming Anti Social Behaviour Act, it further reinforces the need for landlords to consider using the services of a good agent when letting their property.”