Goodbye Piccadilly, and hello to Princes Street
According to the popular First World War song, “Tipperary”, the streets of London were said to be “paved with gold”. A century on, however, this no longer seems to be the case.
An updated report from the Office for National Statistics has revealed that 336,000 people left London for other parts of the UK in the year to June 2017. With 229,405 moving to the capital from other parts of the UK this put London’s net migration at 106,608.
It may come as a surprise to some that the largest single proportion of those leaving London moved to Scotland, although judging by the demand for rental property in Edinburgh I am certainly not one of them.
Many of those currently seeking accommodation have moved north from London, unsurprisingly a good number being expatriate Scots returnees but substantial numbers are English, fed up with high house prices or rental rates, traffic congestion and crowded trains.
Currently our office is taking circa 700 recorded telephone calls over a typical weekend from people seeking rental accommodation. And lest this be inferred as a plug for DJ Alexander, I am sure the same situation is being repeated, pro rata, in many other bona fide agency offices in urban Scotland, particularly Edinburgh and Glasgow. A few weeks ago, an open viewing of a rental property in the popular Stockbridge area of the capital led to no fewer than 50 interested parties turning up.
Okay, so this number might be exceptional for a single viewing, but nevertheless it reflects the level of demand for inner-city districts of Edinburgh like Stockbridge. For someone who has become inured to a two-hour both ways daily commute, the ability to afford suitable accommodation in Stockbridge or Bruntsfield, which enables them to walk to work, equates to a huge improvement in quality of life – as, indeed, does a 20-minute bus ride from one of Edinburgh’s suburbs.
For much the same reason, new-build apartments close to the city centre (eg Fountainbridge) are also rising in popularity and, for landlords, looking increasingly like a good investment. (Until relatively recently residential investors targeting Edinburgh’s inner city tended to favour traditional over modern on the basis that the former provided greater returns, particularly in terms of capital growth, but the market is changing.)
Despite the above, I would urge cur- rent and potential landlords not to view inner Edinburgh as some sort of proverbial money tree. True, many applicants for tenancies are professional people with relatively good salaries who are prepared to pay the asking rent (and perhaps a little more) to secure the right property. But they have their heads screwed on so if con- fronted with a price they consider exploitative they will walk away, perhaps opting for something cheaper in a less immediately accessible (but nevertheless pleasant) suburban area.
What landlords can feel good about, however, is that this level of demand means rental voids (ie the periods between one tenant departing and another moving in) will be kept to a minimum, so they can be more discerning in choice of tenant. The highest-paying tenant is not necessarily the best occupant to have; other factors like financial and employment background, personality, attitude and expectations all come into play. The experienced landlord knows this is much preferable to letting out to someone waving a fat cheque book.
Is the current situation a temporary phenomenon? I honestly do not believe so. Edinburgh’s population has been projected to rise to nearly 600,000 by 2030 and no matter if green belt restrictions on the boundary are relaxed, the inner city – where demand is at its greatest – cannot be physically expanded. And the situation has not been helped by the shift of some conventional, long-term rental stock to Airbnb and other types of short-term lettings to tourists, although legislation to curtail this seems increasingly likely.
● David Alexander is MD of DJ Alexander
Many of those currently seeking accommodation have moved north
from London