Scotland’s cities see boom in tenants

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by Gill Montia

Buy-to-let investors in Scotland’s cities are seeing a boom in the number of people seeking rented accommodation.

Citylets, the region’s biggest letting portal, reported that last month was its busiest January to date, with over 80,000 searches for property to rent in Edinburgh and Glasgow.

Edinburgh saw a 27% rise on January of last year, and Glasgow a 20% increase. Demand for two-bedroom properties in Edinburgh rose by almost 34%.

Thomas Ashdown, Citylets’ managing director, believes the rush of tenants includes potential first-time buyers wary of entering the property market and those who have been unable to secure mortgages because of tighter lending criteria.

He explains that both these factors “drive more people to rent, and for longer, and we expect the demand for properties will continue to soar well into the third-quarter of 2008″.

Adding: “This is good news for landlords and their agents, but tenants should expect to see rent rises in some areas.”

Reports of strong demand for rented accommodation can only offset concerns that some buy-to-let investors will be forced out of the market by rising interest rates and a fall in capital appreciation.

However, analysts are keen to remind landlords that residential property should be viewed long term investment.

According to Stuart Turner, financial planning consultant at PKF business advisers and consultants: “Existing buy-to-let landlords looking to add to their portfolios are currently the ones best placed to ride out the volatility. The grass is not as green for amateur landlords with one or two properties, who will struggle through any void periods.”