Scotland's landlords are reaping the rewards of a crowded rental market, the team here at Clear Property Investment learned this week.

The increase in demand over supply has helped push average monthly rents up.

A report by residential lettings portal Citylets showed the average monthly rent in Scotland was up 3.3 per cent on the previous year to £654. In Glasgow it was £590 and in Aberdeen £854.

Dan Cookson, Citylets Market Analyst, said: "Earlier in the year, we predicted the rental market in Scotland would continue to improve for landlords throughout 2010 and it's clear that this is indeed the case.

"We've seen two successive quarters where rental levels have grown while time to let figures have fallen - it's evident demand in Scotland's private rental sector is growing while supply is somewhat constrained."

In Glasgow three-bedroom properties have been the most sought-after while in Edinburgh two-bedrooms were snapped up quicker. The survey also showed the number of homes taking more than four weeks to rent had plummeted from 60 per cent in 2009 to 49 per cent today.

The Association of Residential Lettings Agents (ARLA) confirmed the gap between tenants and available properties was growing. They reported that 70 per cent of its member offices (11 per cent more than last quarter) said they had more tenants looking for homes than they did properties.

UK Mortgage Lender Paragon reported a five per cent increase in tenants for buy-to-let properties between April to June this year. And one third of those surveyed predicted the figure would rise over the next 12 months.

The news has encouraged many landlords to increase their property portfolios with 21 per cent saying they planned to purchase more property according to Paragon. The company's Chief Executive Nigel Terrington said:

"Tenant demand has been rising consistently for two years and shows no signs of slowing down...longer-term social changes, such as greater numbers of single person households and economic migrants, are creating more demand for rented property."

The only downside is the availability of mortgages with more than half of those landlords surveyed admitting it was more difficult to secure finance.

"Strong tenant demand is great news for landlords, but will lead to rental inflation for tenants unless the private rented sector is able to expand to meet this demand," Mr. Terrington warned.

For more information on property purchasing and remortgaging or securing finance contact any of our Clear staff.

View other news from July 2010