RENT prices have dipped below the £1000 threshold once again, just months after reaching a five-year peak.
The average cost of renting a city property has fallen to £961 per month – despite rent levels soaring for larger family homes.
Earlier this summer, independent letting agency DJ Alexander reported that city rents had reached their highest level since 2008, smashing the four-figure barrier for the first time.
But now experts say that a growing stock of smaller properties has helped to halt the city’s spiralling rental market.
However, the cost of a three-bedroom house in suburban Edinburgh has shot up by a quarter since May – having peaked at £1232 per month.
A five-bedroom flat now comes in at £2166 per month, versus just £1825 earlier this year.
Rob Trotter, senior property manager at DJ Alexander, said the price hikes stem from basic supply and demand with fewer large properties coming on the market.
“Reducing stock is largely responsible for the sharp rise in house rents,” he said.
“Reluctant landlords have been finding buyers on the back of an improving sales market, leading to fewer homes available to let. Less stock inevitably leads to higher rents.”
Christine Campbell, regional managing director of Your Move, said that many city homeowners had been hesitant to sell their properties until after the Scottish Independence Referendum – and had been turning to rental as a temporary source of income instead.
“The question of Scottish independence loomed large over the housing market this summer, and property price growth faltered as would-be buyers and investors hesitated to see how the votes rolled in,” she said. “This impact was cushioned by stable and resilient rental income.”
Scott Brown, a partner at Warners Solicitors and Estate Agents, said: “In September, things normally pick up, but this didn’t happened this year because of the referendum.
“There was a combination of people delaying both buying and selling as they were concerned how the vote would go.
“But in the last six weeks, there has been a marked increase in activity – from both buyers and sellers.
“We’ve seen about a 20 per cent spike in properties being listed for sale compared with four to five weeks ago.”
These figures tally with ESPC reports which indicate that the number of homes being sold across the Lothians has jumped by 20 per cent since last year.
The supply of properties available has al so surged by 13 per cent year-on-year, they claim.
David Marshall, business development manager with ESPC, said the boost in the number of higher value homes for sale could be a result of next year’s proposed shake-up of stamp duty.
The new land and buildings transaction tax (LBTT), which will replace stamp duty in April, will mean those buying expensive homes could face a larger tax bill.