Roof caves in on city rental market as fees plunge £200.
By MICHAEL BLACKLEY, Evening News
THE boom in the rental price of property in the Capital has officially come to an end, with some flats plunging in price by up to £200 a month, letting agents said today.
The growth in "reluctant landlords" who rent out a property because they cannot sell it has led to an oversupply of property to rent - with bundles of "to let" signs suddenly springing up across the city.
With supply now outstripping demand, the average rental price has declined for the first time as landlords slash rents in a bid to entice tenants in.
Edinburgh-based Braemore Property Management said one of its flats in the Leith Docks area was re-let for £200 less than the previous tenant paid.
The firm, which has 850 properties across the city, said that the average flat that it had re-let to a new tenant in March was achieving £58 less than it was with the previous tenant.
It follows a £19 decrease in January and a £52 decline in February and comes after separate figures from online letting site Citylets showed that the average two- bedroom flat in Edinburgh was 1.9 per cent cheaper than it was a year earlier, at £519.
Colette Murphy, director at Braemore, said: "It's important to stress that this is not any sign that the rental market is in trouble.
"There is still a lot of demand for rented accommodation.
"Many people are choosing not to buy a home in the current economic climate and, instead, want to rent - either as a lifestyle choice or to save up enough money to use as a deposit on a home when the market improves.
"However, this has coincided with a rise in the supply of homes being put on the rental market.
"Many reluctant landlords - people who have turned to renting after failing to sell their property - have entered the rental sector and there is a much wider choice available for tenants."
She said that the wide availability of choice for tenants had led to greater competition among landlords.
Property investor David Heraghty, 43, who owns six flats at Dalry Gait, off Dalry Road, said he had shaved off up to £50 a month from the rent of some flats he owns.
He said: "I am taking a hit but it's all about getting the right type of tenant.
"I don't want hassle, wild parties or animals in the flat, I want a quality tenant and if they want it a bit cheaper I am willing to do that."
He added: "You won't gain short-term by renting out a flat, but if you look at it on a ten-year basis, things will bounce back."
Steven Currie, a director of Charlotte Square-based Murray and Currie, which advised Mr Heraghty, said: "It's so competitive and we are saying to owners if you get the right person coming along they should consider a reduction by £75 or £100.
"It's not in our interest either because it means lower management fees for us but we are saying that if it means getting the right type of tenant it can be worth it."
VARYING FORTUNES
LETTING agents says some areas have suffered much bigger rent declines than others.
Among the worst-hit has been the new-build market, according to Steven Currie, director of Murray and Currie.
He said that the average price of a two-bedroom flat in new developments such as Western Harbour would typically now achieve rent of £600-£625 a month, compared with £750-£775 a year ago.
Areas with an older stock of flats but cheaper property prices are also now said to be suffering rent declines.
Gorgie and Dalry have proved popular in the past and a one-bed flat in either area would typically have achieved around £525-£500, but now that has fallen to £450-£475.
However, Mr Currie said that other areas, such as the New Town and Stockbridge remained so popular that prices would have only declined marginally.