Investors – could this be the time to consider investing in Scotland?
Investors could help to plug the shortage of private rented properties in Scotland, which is in desperate need of new supply.
According to DJ Alexander, now part of the Lomond Group, the Scottish private rental market is facing considerable shortages as the economy recovers and employment vacancies increase. It said that Scotland’s economic recovery is picking up rapidly, resulting in increasing demand for workers. Yesterday, for example, the ONS reported that vacancies reached a record high between October to December in the first data to be published which excludes the impact of the furlough scheme.
DJ Alexander believes this demand for workers will “surely trigger a return of many EU citizens and, perhaps from further afield, to meet the need for people to fill these posts in the coming months”. It added that the economy needs more people to meet this employment demand to ensure growth continues at pace. However, the firm says that an influx of workers require places to live and the private rented sector is already facing considerable shortages in Scotland. Rightmove, for instance, is currently showing just 376 properties available to rent in Edinburgh. In August last year, that figure was just over 600, but was as high as 1,900 as recently as June last year.
David Alexander, the chief executive officer of DJ Alexander Scotland, explained: “We are seeing unusually high levels of demand for rented property in Edinburgh and elsewhere. Our firm would normally have around 190-200 properties available at any one time, but we currently only have 43. Enquiries continue to be at record levels and, even though we have new properties coming on the market every day, there is little sign of the demand abating.” He added: “It is now clear that we are emerging from the pandemic and life is beginning to return to normal. This will undoubtedly result in a substantial increase in demand for rental properties as more workers return from other parts of the UK and abroad.”
Alexander continued: “With major events such as the Six Nations rugby, the Open Golf tournament, the Edinburgh Festival, and regular concerts and performances returning this year, it is clear that substantial numbers of employees will be required to fill the roles these events create.” “What we will see is a return of many EU citizens who have a right to work in the UK and will return generating enormous demand in the private rented sector. Hundreds of thousands left as the pandemic took hold and I see little reason not to believe they will come back as Covid-19 subsides in
their home countries and in the UK,” Alexander went on. He believes this increase in demand will stretch the sector unless more landlords/investors and more properties come into the market.
“There are many landlords who left long-term letting and moved to short term and holiday lets at the start of the pandemic. This could be the time to return when demand is outstripping supply and we face a severe shortage of suitable property in some parts of Scotland” Alexander said. “Despite these very real concerns about too few rental homes, the overall trend is welcome in that it indicates a clear sign that the market and the wider economy are returning to normal and for that we should all be thankful.”