Rent in Edinburgh now £479pm more expensive than Glasgow

Edinburgh is now the 45th most expensive city in Europe, with a three-bed home costing USD 2119 (£1,529) per month. Conversely, Aberdeen is one of the only cities in the UK to see a decline in average monthly rental costs, dropping by £190 to £1,235 per month.

ECA’s annual housing report also reveals that Glasgow remains the cheapest in the UK, costing USD 1455 (£1,050) per month, £479 cheaper than Edinburgh. ECA’s accommodation report is based on the average cost for an unfurnished, mid-market, three-bedroom apartment.

“In Aberdeen, the downturn in the oil and gas industry means that many employers are returning staff back to their home locations - and their healthy rental budgets along with them,” said Alec Smith, accommodation services manager, ECA International.

“Changes in Scottish legislation over the past few years have affected the supply of rental accommodation in Edinburgh while demand remains strong. Tax increases on the purchase of second homes have driven up landlords’ costs, while the phasing out of shorthold assured tenancies means many landlords have increased rents to cover the perceived greater risks in renting out their properties,” continued Smith.

Dublin is now the 26th most expensive city in the world and fifth most expensive in Europe to rent a three-bedroom, unfurnished home. The Irish capital has risen by a staggering 35 places since last year’s report by ECA. It reveals the average rental price in Dublin has risen to USD 4191 (€3,406pm) an increase of €277.

Smith said: “The past 10 years have seen a significant turnaround in the fortunes of Dublin’s residential rental market. The global financial crisis exposed a property bubble in the Irish capital and rents have increased significantly with each subsequent year of recovery. The cost of renting has also been affected by elevated demand from international companies relocating staff while looking to take advantage of Ireland’s low corporate tax rate.”

Rental costs across Europe rose significantly through 2018, due in part to the strength of the Euro. Whilst Dublin saw the biggest rises in expatriate rental costs in Europe, major cities such as Madrid, Rome, Paris and Barcelona all saw increases over €120 per month.

In Spain, Madrid saw the average expatriate rent rise by €240 to €2299, whilst in Barcelona rent increased by €202 to €2049.

Smith said “Madrid and Barcelona have reversed years of falling rents that followed in the wake of the global financial crisis. Their markets are flooded with renters, both from the local young professional population, and international assignees. Property purchase is now out of reach of the majority of city residents, keeping competition for tenancies high.”

Meanwhile in Paris, as the city continues to target attracting business due to Brexit, demand remains strong for property in the French capital and expatriate rent has risen to €3,324, an increase of over £126.

Elsewhere, Hong Kong remains the most expensive location in the world for expatriate rent, with typical expat accommodation averaging USD 10,929 per month. This is an increase of 4.9 percent from last year.

Smith explained: “Rents increased across Hong Kong during 2018 with limited availability, a long-term issue for the Hong Kong housing market, being the main driver. Rent increases are not just limited to central Hong Kong anymore either, with rents expected to rise throughout outlying neighbourhoods in 2019 too, as international firms seek more affordable office space and try to take advantage of cheaper suburbs.”

Chinese cities endured a mixed fortune throughout 2018 with major rent increases seen in some locations, but static or decreasing levels of rent in others. Shanghai was the highest placed Chinese city and the eighth most expensive city for expats to rent in globally, averaging USD 5,305 a month.

Smith said: “With a new property tax mooted to be introduced in Shanghai from 2020, many landlords are now choosing to sell their properties rather than continuing to rent them out. This has led to a reduction in the availability of rented accommodation, prompting some rent increases.”

New York remains the second most expensive city in the world for overseas workers to rent in, and by far the most expensive location in the Americas. However, rental costs have dropped by over USD 250 since last year, as demand dropped slightly.

Smith added: “2018 saw the market delivery of a large number of newly constructed rental properties. This eased issues with low vacancy rates that normally apply in New York, leading to some modest decreases in average rents.”