05 Feb 2012

2011 a record year for Aberdein Considine Leasing

2011 a record year for Aberdein Considine Leasing

Mike Sinclair, Senior Property Partner discusses the thriving rental market and the reasons behind this trend.

Mike Sinclair, Senior Property Partner discusses the thriving rental market and the reasons behind this trend.

With the number of tenants soaring nationally as people wait longer to buy their first home , the private rental sector is playing a pivotal role when it comes to being a method of home ownership in Scotland and appears likely to do so for the foreseeable future. There are a number of reasons for this trend

Squeeze on first time buyers

A report recently issued by the Bank Of Scotland confirms the number of first time buyers having fallen to its lowest level for 35 years and in the absence of any Government initiatives, renting will continue to be the first choice for many trying to secure their first home.

Factors constraining demand in the sales market such as large deposit requirements, low earnings growth and poor consumer confidence are unlikely to improve dramatically (if at all ) over the coming year.

Furthermore the announcement that the Government will not be extending the stamp duty holiday for first time buyers beyond its end date of March 2012 will do nothing to help what is already a difficult time for young individuals and couples looking to buy their first home forcing them to consider the leasing option from the outset.

Continued growth in the buy to let market

In their November release the CML (Council of Mortgage Lenders) reported the number of new buy to let loans having increased by 16% in the third quarter of 2011. Over the same period the value of mortgages advanced in the sector grew by 19%. The data shows that the pick up in buy to let lending that started in the second quarter of last year continues and whilst still relatively low in comparison to the number of loans advanced and total value of lending set in the peak of 2008, there are real signs of recovery in this part of the market.

With interest rates remaining low and tenant demand proving strong, new and existing Landlords are getting a piece of the action by expanding their portfolios, all of which is assisting in the delivery of an improved supply and choice in the rental market.

Lack of affordable housing

The Government’s intention to effect a 50% cut in the affordable housing budget over two years and a lack of affordable housing generally is leading to a run in demand particularly on those properties at the lower end of the market including one and two bedroomed flats and ex-Local Authority accommodation and this situation is unlikely to change dramatically in the near future.

The North East economy

There is no doubt that the North East retains characteristics which make the area particularly attractive to investors many of whom live and work abroad. There is a diversified market for Landlords in this part of the country stretching from one bed city apartments to country houses affording great potential for those considering entering the rental market as a Landlord or extending a portfolio .

The recruitment and introduction of personnel, particularly by some of the larger oil companies , also ensures that there has been a constant demand for quality rented accommodation recently, right across the North East and that demand is showing no signs of easing up.

2011 proved to be a record year for Aberdein Considine leasing, with a substantial uplift of on the number of managed lets across our branch network when compared with the same time last year. 2012 is showing signs of heading in the same direction.

Michael Sinclair, Partner

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