The changing face of Scotland’s rental sector

The Rettie and Co research team, Scotland’s largest dedicated property research department, has released its summer lettings bulletin.

Among the key findings are:

• Labour tables the Proposed Fair Rents Bill to reinvigorate the case for rent controls.

Build-to-rent gains pace in Edinburgh as the ‘future of the sector’ gathers momentum.

The rental sector is becoming home to a widening range of age groups as the number of over-55s renting is now 12 per cent of PRS households. Edinburgh and Dundee have seen average rents at their highest level.

The average rents in Edinburgh and Dundee have reached their highest level on record in Q1 2019 while rents in Glasgow and across Scotland have fallen back from peak levels seen in 2018.

Conversely, rents in Aberdeen have continued to fall reaching their lowest level since values started falling in 2015.

The days taken to let a property has increased across the board. In Edinburgh, the average time to let increased to 30 days in Q1 2019, the first time it has reached this level since 2012 having reached a low of 18 days in 2014. Glasgow has increased to 31 days which is the same as Q1 2018. Having fallen sharply in Q4 2018 time to let in Dundee has rebounded up to 40 days.

The five-year compound annual growth rate of average rents across Scottish cities has shown a slight slow down over the past two quarters in Edinburgh and Glasgow but remain historically high.

Since rents started rising in 2014 as demand outstripped supply, the five-year annual growth rate has typically been above five per cent in Edinburgh and four per cent in Glasgow.

Having peaked at over six per cent in Edinburgh and almost five per cent in Glasgow in 2018, rates have fallen back to 5.6 per cent and 4.2 per cent.

Figures from the Scottish Household Survey (SHS) support the rise of mature households in the PRS.

The number of households in Scotland over 45 years of age, who are in the PRS, is now 28 per cent, up 3.5 per cent in the past four years according to the SHS.

In Edinburgh the number of households over 45 years in the PRS has remained flat over this period, whilst Glasgow and Dundee have seen increase of 2.5 per cent and four per cent respectively.