Rental agency laments rental prices for ‘crazy’ Glasgow properties
The residential property rental market in and around Glasgow is ‘going crazy’ with rental prices reaching record highs, according to Riccardo giovanacci, the director general of the agency Newton rental.
Mr Giovanacci said monthly rents were reaching levels he had never seen in his 15 years in the industry, and survey levels were off the scale.
He said his offices were processing inquiries at the rate of about 250 a day, with people chasing only a handful of available properties. Inventory levels, he said, have never fallen so low.
“We recently put up a pretty mundane property for sale at close of business and at nine the next morning we had 300 emails and had received 30 phone calls about it. I’ve never seen anything like it, ”he added.
“At the heart of the problem is the continuing shortage of supplies. Only the other day there were only 14 properties available for rent across the G12, Glasgow West End, postcode. In more normal times, there might be 14 properties on a single street. “
Mr. Giovanacci’s firm manages approximately 600 properties on behalf of some 370 owners and aims to grow its portfolio to 1,000 properties in the near future, maintaining an annual growth rate of 10%.
He said the main factor driving rental prices up is the shortage of suitable inventory, a situation reflected in the real estate agency market where the lack of supply linked to Covid-induced demand has led to selling prices. unprecedented.
Scotland led the way in increasing rental property values in the year through March, up 11% from a UK average of 6%. It also tops the rental yield ranking at 5.8%, followed by Northwest at 5.5%. During the year through July, house prices jumped 10.5%, according to the Nationwide Index.
Mr Giovanacci added: “Potential home buyers are struggling to find a property and are turning to the rental market, which adds to the natural demand from transient tenants, up- and downsizers and relocators.
“The market really took off in June with the easing of restrictions combined with the stimulating effect of milder weather. Supply is also affected by people in rental properties staying put, knowing that they would now have to pay significantly more per month for a similar apartment elsewhere. “
He said the situation contrasted sharply with the onset of the pandemic in March last year, when there was a mass exodus as tenants left their homes to move in with family or friends during the duration of the locking. The stock at this time became abundant.
From August to December 2020, the market exploded, but not at current levels. It stabilized from January to June of this year, then exploded again in the third quarter with energy that shows no sign of dissipating.
One and two bedroom flats in the West End and city center are the bread and butter industry for Newton Lettings, and anything in the under £ 1,000 category is flying off the shelves .
Mr Giovanacci said in the £ 1,000-2,000 per month range – i.e. duplex properties, converted townhouses and four-bedroom red sandstone apartment buildings in areas such as Dowanhill Street – properties that could have taken a long time to rent. go in a week.
He continued, “There are very few areas that languish. Demand is widespread, even in less immediately attractive areas of the city. “
And this frenetic degree of activity is also reflected in the sales market, according to Chris Breckenridge, partner of Corum Property, Real estate agencies.
He said: “There are about 80% more active buyers right now than there were at this time last year with much less stock on hand; add to that the race to the bottom that we are seeing from lenders cutting mortgage rates on all products and you now have well funded buyers competing for limited assets, so the classic economy of supply by. relative to demand has driven home prices up to 16 percent in the areas in which we operate.
Looking ahead, Giovanacci said continued market buoyancy will depend on whether or not there is another foreclosure. The end of paid leave at the start of this month could also have unforeseen effects.
He said: “For a long time there was no growth in rents because new rental entrants distorted the market. Growth over the past eight years has been steady and now we have this remarkable surge.
“The ideal would be for the market to evolve towards a period of not exceptional but lasting growth. It would be a longer term benefit for landlords and tenants. “