RENTAL prices in Glasgow’s residential property letting market are soaring to ‘record’ levels, according to the MD of one city agency.
Riccardo Giovanacci, of Newton Letting, said monthly rents are achieving levels he has never experienced in his 15 years in the sector, with his offices handling around 250 enquiries per day. He added that stock levels have never dipped so low.
“We recently listed a fairly run-of-the-mill property at close of business, and by nine o’clock the next morning we had 300 emails and had taken 30 phone calls about it,” he said. “I have never seen anything like it. At the heart of the issue is the ongoing shortage of supply. Only the other day, there were just 14 properties available for rental in the entire G12, west end of Glasgow, postcode. In more normal times, there could be 14 properties in a single street.”
Newton Letting manages around 600 properties on behalf of some 370 landlords and is aiming to increase its portfolio to 1,000 properties in the near future.
“Prospective home buyers are struggling to find a property and are turning to the rental market, adding to the natural demand from transient renters, up- and downsizers and relocators,” Riccardo Giovanacci added. “The market really took off in June with the easing of restrictions allied to the stimulating effect of the better weather. Supply is also being affected by people in rental properties staying put in the knowledge that they would now have to pay significantly more per month for a similar flat elsewhere.”
This degree of activity is also reflected in the sales market, according to Chris Breckenridge, a partner in Corum Property estate agents. He said, “There are around 80% more active buyers right now than there was this time last year with significantly less stock available; add to that the race to the bottom that we are seeing from lenders who are cutting mortgage rates across all products and you now have well-funded buyers competing for limited property, so classic supply versus demand economics have pushed house prices by as much as 16% in areas in which we operate.”
Riccardo Giovanacci said continuing buoyancy will be dependent on whether of not there is another lockdown, while the ending of furlough payments could also have an impact. He said, “For a long time there was no rental growth as buy-to-let entrants distorted the market. In the last eight years, there has been steady growth and now we have this remarkable surge. The ideal would be if the market evolved into a period of unexceptional but sustainable growth. That would be of longer-term benefit to landlords and tenants alike.”