The latest quarterly report from Citylets has revealed that in the first quarter of 2013 average monthly rents in Scotland rose by 1.7% over the year.
Over the same period, Registers of Scotland recently reported that average sale prices for flats in Scotland were down by 1.7%.
Analysis of gross rental yields (GRY) in Q4 2012 shows that the three local authorities with the cheapest flat purchase prices have the highest GRYs of above 8%: these are North Lanarkshire 8.8%, Renfrewshire 8.6%, and Falkirk 8.5%.
In Edinburgh, a typical 2 bedroom flat achieves rental income of nearly £9,000 per annum but with a higher average purchase price this drives down typical GRY to 5%.
The major Scottish cities all saw larger rises in rents than the Scotland figure with Edinburgh up 3.7% at £817 and Aberdeen up 5.3% at £961, which sets a new high for the city which is now 42% more expensive than the Scottish average. Glasgow saw average rents increase by 2.9% to £613 while Dundee, the cheapest city in Scotland to rent, saw growth of 3.2% to £572.
Dan Cookson, senior analyst with Citylets, said: “We’re seeing continued, moderate growth in rents at the national level, though within the cities rents have increased more significantly. Renting is firmly established as a lifestyle choice now, rather than just something to do while you save up to buy a property of your own, and many tenants are happy to chose renting whilst the sales market remains flat.
“The Private Rented Sector has performed well over the last year and coped with an increase in regulation such as the introduction of tenant deposit schemes and the banning of letting agents charging fees to tenants. With the housing sales market still flatlining, many tenants are delaying their step onto the property owning ladder in the knowledge that they are not missing out on house price appreciation.
“Four bed properties in Aberdeen saw the biggest rise of 16.2% to £1,924 while average prices for two bed property rose 3.9% on last year to £898 and three beds rising to £1,265, an increase of 5.4%.
“Time to let (TTL) figures for Aberdeen shortened by eleven days and are now the lowest in the country with an average property taking just 19 days to rent compared to 30 days in the same period in 2012. This is a clear indication of continued strong demand for rental property in the granite city which can be partly explained by a booming oil and gas sector.”
Two and three bed properties in Edinburgh saw increase in rents with two bed properties now standing at £730, a 1.3% rise on last year. Three bed properties increased by 6.5% to bring rents to an average of £1,100 in the capital.
Time to let figures were also shorter in Edinburgh with the average property taking 29 days to let, an improvement of eight days from last year.
Cookson added: “Although Glasgow rents remained comparatively more affordable, it also experienced an increase in rents. Glasgow’s average mix adjusted rent increased by 2.9% and now stands at £613.
“Two bed properties increased by 2.8% to £622, three bed properties in Glasgow increased by 0.6%. Time to let figures shortened slightly with the average property now taking 41 days to let compared to 45 days last year.”