With supply continuing to be an issue the result is likely to be that many renters may be unable to get the home they want as landlords can be pickier
Wealthier tenants will benefit from stiffer affordability criteria as stock levels fall and demand increases, according to DJ Alexander Ltd, which is part of the Lomond Group.
Taking Scotland as an example, the group says the share of tenants requiring a guarantor has increased from 9.3 to 13.5 per cent over the last three years and landlords are increasingly asking for greater guarantees in the areas where demand is greatest.
Scottish rental prices rose by the largest amount last year compared with any of the other home countries and demand remains extremely high and it is likely to increase as the pandemic recedes and the economy opens up.
With supply continuing to be an issue the result is likely to be that many more renters may be unable to get the home they want as landlords can be pickier and choose the most financially secure tenant for their property.
David Alexander, chief executive officer of DJ Alexander Scotland, comments: The continuing high levels of demand coupled with low stock numbers is producing a very difficult time for renters in Scotland. It is unprecedented for there to be so little stock available, and the result is rising prices, increasing affordability issues for tenants, and landlords seeking to secure the rent using a guarantors’ backing.
Given the scale of this issue at the moment I believe that we need to encourage many more landlords to come into the private rented sector in Scotland which offers good rental returns, and excellent capital growth, he says.
He concludes: With many thousands more EU nationals likely to return to Scotland this year I believe we may face a housing crisis with too few properties to meet demand.
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