Thwarted buyers boost rental market

THE decline in the cost of private rented accommodation in Scotland has halted and rents could be set to rise again next year, new figures suggest.

Demand for rental property is growing as would-be first-time buyers continue to be frozen out of the housing market by strict lending criteria and high deposit demands, the letting portal Citylets has claimed.

Its latest quarterly report shows that the average time it takes to let out a flat – an indication of demand for the private rental sector – was 41 days in the first three months of this year, down from 48 in the same quarter in 2009. And the number of properties taking more than four weeks to rent has dropped from 62 to 51 per cent over the same period.

Dan Cookson, senior analyst at Citylets, said: "Although some agents are reporting sales growth at the upper end of the market at the moment, the truth is that many younger people in Scotland simply cannot afford to buy a property. Mortgage lending criteria are still tight and you need to have large deposits in place to purchase properties – which the majority of would-be first time buyers do not possess."

The average monthly rental in Scotland is now 638, up 1.3 per cent on the previous quarter, according to the report.

The highest rents are in Aberdeen, where the average one-bedroom letting cost is now 556 – up 0.5 per cent since early 2010 – and two-bedroom flats are 796, up 2.1 per cent on last year.

The average rent for one-bed properties in the capital is unchanged at 520, while the average time to let has fallen by a week to 33 days.

Two-bed flats in Edinburgh now average 664 after a 1.3 per cent drop since quarter one in 2010. And in Glasgow the average one-bed flat has dropped 1.3 per cent to 448, but there has been a 3.4 per cent hike to 604 in the typical rental cost for two-bedroom flats.