01 Nov 2019

Dundee rental market closes gap on Aberdeen

Dundee rental market closes gap on Aberdeen

Strong annual price growth in Dundee's home-rental market means the city is now closing the gap on Aberdeen.

This emerged in the latest quarterly report from property letting portal Citylets.

Its analysis also reveals that the average rental cost in Edinburgh has hit a record high, while the typical rental property in Glasgow has now broken through the £800 mark for the first time.

Citylets says that the average rent in Scotland in the third quarter of this year was £821 - up 4.1% year-on-year.

The biggest rise was in the four-bedroom category - a jump of 8.3% to £1,525 - while the second-largest gain was in the three-bedroom sector, which soared 6.2% to £1,033.

Citylets says this increase in prices for larger rental properties in Scotland was driven in part by strong student demand throughout this summer.

Dundee posted the largest year-on-year gain of the major cities north of the border, with typical rents up 4.8% to £633 - continuing a long and steady upward trend. The four-bedroom category saw the city's biggest jump of 8.3% to £1,168.

However, Aberdeen saw its average rents dip by 3.9% to £716 as the city continued to be hit by the impact of the recent downturn in the oil and gas sector. The four-bedroom category performed best, with a year-on-year drop of only 0.8% to a typical rent of £1,425.

Citylets says that, for the first time, the price gap between Dundee and the Granite City is beginning to suggest possible convergence.

It adds: "The rental data for Dundee is consistent with the resurgence of Scotland's fourth-largest city."

Despite the latest drop in Aberdeen rental prices, the oil and gas industry located in the area is improving - and one local letting expert is optimistic about what the future holds.

Karolina Robertson, Aberdeen lettings manager at Aberdein Considine, told Citylets: "The third quarter of 2019 has been extremely busy, with a record month for number of signed lets recorded in August.

"With a large portfolio of properties on our books, we have been able to attract all types of tenants, with one and two-bedroom properties generating most interest.

"We also noted a slightly increased interest in higher-end properties from private tenants and relocation agents, which again may indicate that the feel-good factor in the energy sector is reaping tangible benefits.

"It has undoubtedly been a challenging couple of years in the region, but the market is certainly showing signs of recovery."

Citylets says rents in Edinburgh continue to rise for all property types, but the trend of reduced annual growth also persists.

Property to rent in the capital now costs a record high of £1,148 per month on average, up 3.6% year-on-year.

It now takes 27 days to let a home in Edinburgh - six days more than the previous year, but one-bedroom properties in particular continue to rent quickly at a typical 20 days on average.

Citylets says the Glasgow rental market continues to operate at a sustained and fast pace.

The average property to rent is now above £800 for the first time at £803 per month (up 2.3% year-on-year) and taking 27 days to let - three days slower than the third quarter of 2018.

One-bedroom properties in Glasgow rented fastest at 22 days - unchanged on last year. Overall 67% of homes were let within a month - identical to Edinburgh.

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