A report published today suggests that rents rose by over 3% over the last quarter whilst tenant incomes appear to have risen by less than 1% over the same period. The data was collected by HomeLet for the company's quarterly rental index, but let's have a look beyond the headline.
According to the story, the rental increase is less than it has been in previous years, which suggests a slow down in the development of rents for private rented property. However, the authors also hint at a decrease in the number of private rented properties available.
They may have a point here, especially when you add the news from the Land Registry which today announced a decrease in house sales between October and January. Not exactly the same period, but relatively similar nonetheless.
What's our take on it? It's quite simple, really. Prime residential property available for rent will always relatively high rents. However, tenants need to be able to afford the property they live in in the longer term - both when it comes to the rent as well as other monthly outgoings such as utilities. As a landlord with prime property, it is essential - and only fair to both parties - to check that you are renting the property to someone who can afford it.
Will rents continue to rise? This depends on supply and demand and will vary dramatically between different cities. In Edinburgh, demand for high quality lets for students and professionals continues to grow year on year which suggests that rents may continue to rise. However, more properties are becoming available, meaning supply is growing at the same time as demand.
The conclusion? At this point it looks like there's no need to panic just yet - at least not in Edinburgh.
Tuesday 30 April 2013
Wednesday 24 April 2013
Buy-to-let hot spots - does Edinburgh make the grade?
Research conducted by HSBC is showing that Southampton is the top spot for buy-to-let investment in England and Wales. Shame the bank didn't include Scotland in their study, but nonetheless, the results are good news for Edinburgh.
Looking at the top five cities in the survey, they all produce rental yields between 7 and 8%, have a lot of private rented accommodation available and the initial outlay for the investment is not too high.
Comparing this to Edinburgh, it's obvious that the city is even better placed than its competitors 'down South'. Depending on the property purchased, net yields regularly break the 7% mark, with some of them as high as 12%.
Properties available for investors include highly sought after traditional tenements, some of which may be in need of refurbishment. For investors, this is often an advantage, allowing them to unleash the property's full potential as a private let.
What's more, Edinburgh has a large population of students and professionals who are keen to rent high-quality properties and are specifically looking for good value rather than the cheapest monthly rate.
And how about the initial investment? Edinburgh may not be cheap, but it certainly offers easier access to investors than London does. Looking at London's affluent boroughs of Hammersmith & Fulham and Kensington & Chelsea, which generate returns between 3 and 3.5% respectively, there is simply no comparison.
For more information about investment properties in Edinburgh, contact us directly.
Looking at the top five cities in the survey, they all produce rental yields between 7 and 8%, have a lot of private rented accommodation available and the initial outlay for the investment is not too high.
Comparing this to Edinburgh, it's obvious that the city is even better placed than its competitors 'down South'. Depending on the property purchased, net yields regularly break the 7% mark, with some of them as high as 12%.
Properties available for investors include highly sought after traditional tenements, some of which may be in need of refurbishment. For investors, this is often an advantage, allowing them to unleash the property's full potential as a private let.
What's more, Edinburgh has a large population of students and professionals who are keen to rent high-quality properties and are specifically looking for good value rather than the cheapest monthly rate.
And how about the initial investment? Edinburgh may not be cheap, but it certainly offers easier access to investors than London does. Looking at London's affluent boroughs of Hammersmith & Fulham and Kensington & Chelsea, which generate returns between 3 and 3.5% respectively, there is simply no comparison.
For more information about investment properties in Edinburgh, contact us directly.
Wednesday 10 April 2013
Student property wins the day
Edinburgh student property continues to prove a solid, reliable investment with (nearly) all of Cullen's managed properties for the student market letting within weeks of being released. In fact, many of the flats in the most desirable areas such as Marchmont and Bruntsfield were let within hours of the first viewing. So what makes student property in Edinburgh so popular?
From an investor's and landlord's point of view, the obvious draw is the rental yield which can reach up to 12% and is typically in the region of 7%. What's more, the capital required to invest makes the city a lot more accessible to investors than, say, London. Add to that an ever-growing student population and it's easy to see why the market is looking good.
Does that mean anything rents? No, definitely not. Buying 'any old property' and hoping students will live in it, won't work. It's about knowing the most sought-after areas, often closely located to universities as well as amenities, shops, bars and cafes, and the most sought-after property types. Many Edinburgh students are keen to share a spacious, traditional tenement flat with their friends, making three to five and even six bedrooms popular.
Edinburgh students want and can afford quality, so it pays to refurbish and furnish a property to make it attractive for prospective tenants. It would be hard to decide whether the city is a tenant's or a landlord's market - it really is a bit of both.
From a tenant's point of view, the city ticks even more boxes, including a choice of highly regarded universities, paired with unparalleled cultural offerings in a beautiful city setting. Then there is the availability of desirable traditional properties in great locations and while there is no shortage of student properties there is certainly room in the market for more high quality flats in popular areas.
From an investor's and landlord's point of view, the obvious draw is the rental yield which can reach up to 12% and is typically in the region of 7%. What's more, the capital required to invest makes the city a lot more accessible to investors than, say, London. Add to that an ever-growing student population and it's easy to see why the market is looking good.
Does that mean anything rents? No, definitely not. Buying 'any old property' and hoping students will live in it, won't work. It's about knowing the most sought-after areas, often closely located to universities as well as amenities, shops, bars and cafes, and the most sought-after property types. Many Edinburgh students are keen to share a spacious, traditional tenement flat with their friends, making three to five and even six bedrooms popular.
Edinburgh students want and can afford quality, so it pays to refurbish and furnish a property to make it attractive for prospective tenants. It would be hard to decide whether the city is a tenant's or a landlord's market - it really is a bit of both.
From a tenant's point of view, the city ticks even more boxes, including a choice of highly regarded universities, paired with unparalleled cultural offerings in a beautiful city setting. Then there is the availability of desirable traditional properties in great locations and while there is no shortage of student properties there is certainly room in the market for more high quality flats in popular areas.
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