As my regular readers know, my passion is talking about the Edinburgh property market which I hope will be of interest to both homeowners and buy to let landlords alike. However, this week, I want to highlight the plight of the tenants of Edinburgh as more and more of their wages are being taken up by ever increasing rents.
The cost of renting a home in Edinburgh has broken through the £1,000 a month barrier as the average rent for a property in the City now stands at £1,014 per month which is around 7.6% higher than 12 months ago.
House price inflation has certainly eased in Edinburgh from the heady days of 2014 but with consumer price inflation being below 1% virtually any increase in property values means that in real terms property is still getting more expensive. Meanwhile, many tenants have given up saving for a mortgage deposit as rents continue to take more and more of their wage packets leaving nothing to save for a deposit. That means, more and more tenants are deciding to rent for the long term and therefore the desire for decent high quality rental properties continues to exceed the available rental stock.
I would go as far as to suggest that rents are an ideal barometer to the state of the local economy as a whole and strongly believe that the recent increase in Edinburgh rents are a sign that the Edinburgh economy is picking up.
This means Edinburgh landlords are continuing to capitalise on the Edinburgh property market. The most recent Registrars of Scotland data suggests the annual property price rises in the town have eased over 2016, leaving property values 2.3% higher than 12 months ago – last year annual property price rises were running at almost 4%. With property price growth easing off, the increasing rents mean that rental yields are strengthening for the first time in years to compensate. The mortgage market has become more stable and so everything is set to be good news for landlords; even with the Chancellors change of tax rules in the coming years for buy to let mortgages.
You can get some amazingly low mortgage rate deals at the moment, so with mortgage rates so low and returns still extraordinarily attractive, there’s rarely been a better time to invest in rental properties.
However, (you knew there would be a however!), it’s all about buying the right property at the right price. Not all property types are seeing equal rises in rents and capital growth. Different parts of the City, different types of properties are experiencing quite different changes. For example, the average length of time Edinburgh one bed properties take to rent is 14 days whereas it takes on average 28 and 36 days to rent 3 and 4 bed properties respectively.
When you start comparing different parts of Edinburgh, the numbers are even stranger! The bottom line is that you must take advice and opinion. One source of advice and opinion is The Edinburgh Property Blog. In The Edinburgh Property Blog, you will see many more articles like this, discussions and even what I consider to be the best buy to let deals around, irrespective of which agent is selling it.
Whether you are a landlord, a ‘Homes Under the Hammer’ addict or just a homeowner who is interested in what is happening to the local property market, then please visit The Edinburgh property Blog (www.theedinburghpropertyblog.co.uk), contact us for a chat (phone me on 31 603 4570) or email me (firstname.lastname@example.org).