Very Dear Green Place: Residential property rental prices “going crazy” in Glasgow

RENTAL prices are rocketing in Glasgow, according to the boss of Newton Letting.

Riccardo Giovanacci says residential lets are up by 20% – 30% across the board with enquiry levels “off the scale”.

Some three-bedroom properties have soared to almost £1,500 a month and even one-bedroom flats are costing tenants £850 a month.

Giovanacci said a “run of the mill” property prompted 300 emails and 30 phone calls overnight from prospective tenants.

He said stock levels had never dipped so low and monthly rents werer hitting heights he had not experienced in 15 years.

“We recently listed a fairly run-of-the-mill property at close of business,” said Giovanacci.

“By nine o’clock the next morning, we had 300 emails and had taken 30 phone calls about it. I have never seen anything like it.”

Examples of soaring rental prices in Glasgow include:

• A Thornwood Ave  3 Bed going from £1250pcm to £1495pcm (+20%);
• An Argyle St 2 Bed going from £995pcm to £1250pcm (+25%);
• A Woodlands Rd 2 Bed up from £995pcm to £1200pcm (+20%); and
• A Dumbarton Rd 1 Bed soaring from £650 to £850pcm (+30%)

Giovanacci added: “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.”

 His firm manages around 600 properties on behalf of some 370 landlords and is aiming to increase his portfolio to 1,000 properties in the near future, maintaining an annual growth rate of 10%.

 Scotland led the way in increases in the value of rental property in the year to March, with a rise of 11% compared to a UK average of 6%.

It also topped the table for rental yields at 5.8%, followed by the North West at 5.5%. In the year to July, house prices jumped by 10.5%, according to the Nationwide index.

Giovanacci said: “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.

“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.”

He said the situation contrasts starkly with the start of the pandemic in March last year when there was a mass exodus as renters left their accommodation to move in with family or friends for the duration of the lockdown. Stock at that time became plentiful.

Now, in the £1,000 to £2,000 a month range – duplex properties, converted townhouses and four-bedroom red sandstone tenement homes in areas such as Dowanhill Street – properties which might have been expected to take some time to let are going within a week.

And this degree of frenetic 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.

“Classic supply versus demand economics have pushed house prices by as much as 16% in areas in which we operate.”