Scottish letting agents give us their views on their local market.
“We have witnessed increased tenant activity in the Aberdeen lettings market in the last quarter. Good quality one bedroom flats in particular are much sought after with some achieving higher rentals than the asking price. The middle market remains challenging with supply outstripping tenant demand at the moment. However, properties in good condition with en-suite facilities and off street parking are proving to be more popular than those without. The top end of the market is also showing some signs of improvement with an increase of professional personnel moving to the area, which has meant we have been able to secure tenancies for some of our more exclusive properties.”
“Q2, as always, has been a busy period as the students populate the majority of the rental market, which has resulted in the continuation of healthy rents. However, we have seen a few more vacant periods than usual which has resulted from tenants being able to give notice more freely if they are on a PRT lease. However, this has not been a serious concern as there has still been a strong and plentiful demand throughout the months. Property sales are also continuing to pick up meaning rental properties are being lost to the sales market but there is still a steady flow of incoming landlords, especially from those interested in a tenant find only service.”
“Q2 is the time of year when we turn our attention to letting our clients’ student properties for the next academic year. This year we have managed to grow our supply of student properties but in general the supply of student properties in Edinburgh does appear to be shrinking. This has led to upwards pressure on rents and our student properties being let out prior to Easter.”
“Q2 has seen the Edinburgh market continue to perform well with demand for all property classes far outstripping supply. Well-presented 1 bedroom traditional properties in particular have been attracting unprecedented levels of interest from young professionals. Landlords based in the UK and abroad, in particular Hong Kong, have continued to invest in Edinburgh to satisfy the seemingly never-ending demand for rental accommodation. The student market for traditional 3, 4 and 5 bedroom properties continues unabated even with the addition of the numerous purpose built student developments. With current market conditions 1LET see no reason for this strong market to cool.”
“As mentioned in my last report for Q1, the frothiness of the rental market in the last quarter or so in Glasgow looks to be moving into a period of stability with landlords seeing reduced tenant turnover and solid returns on investment. There also appears to be some hesitation amongst new investors though as they get to grips with the weight of recent regulations - and this may well prove to be a factor with year-end prices possibly decelerating - again, into a period of stability.”
“Q2 has exhibited the growing divergence between the availability of property-v-demand, especially in the one and two bed markets. TTL’s remain numbered in days, not weeks. Rents continue to rise steadily. Possibly because of tighter stress testing by lenders and ‘portfolio’ testing since Oct 2017, smaller property BTL investors have diminished. Conversely, investor interest in Edinburgh from cash buyers and larger property investors has increased. Rent increases in HMO properties were between 3-5% this year. The student market remains extremely strong. And 6 months on from the introduction of PRT it appears to have bedded in well in the short term. What effect it may have on the holiday rental market, student ‘cycle’ and the Festival letting market remains to be seen in coming years given its perceived lack of forward planning allowances.”
“The letting industry has continued to grow during Q2, with demand still outstripping supply and rents continuing to increase. The majority of movement in the market comes from people moving into the city, rather than existing renters moving around the city. As the summer approaches this expects to be a trend we continue to grow.”
“Q2 of 2018 in Aberdeen has been a very busy period for us at Northwood with good movement for competitively priced and well maintained properties. The market seems to have stabilised somewhat rather than being a race to the bottom as it had been in previous quarters. The key remains for landlords to ensure that their property attracts tenants as there continues to be significant choice. For a successful let a landlord must present the property in immaculate condition, advertise at the correct market value so the property appears in tenant searches and market the property using successful platforms that reach prospective tenants on a timely basis.”
“The buy to let ‘change train’ continues to puff puff its way along the track. New landlords are entering the market recognising the great investment opportunity it represents. Some existing landlords are leaving the market as things are not as good as they were given the recent tax and legal changes. Some letting agents are implementing the new letting agent regulations but others are not, which is likely to result in future consolidation of the market. Interestingly, the one set of people who do not seem to be changing are tenants as there continues to be strong demand from them.”
“It’s been a very busy 2018 in the PRS in Edinburgh. I can’t remember another year where the clamour for properties from prospective tenants was so strong. This seems to highlight the continuing trend in the market of not enough good rental properties to meet the tenant demand. Consequently, rents continue to increase rapidly making it a tough time to be a prospective tenant in Edinburgh. Tougher taxes are deterring new landlords from entering the market but this is compensated by the increasing rents (and yields). It’s hard to predict where this will lead; the council seem to be no nearer dealing with the proliferation of Airbnb and large scale build to rent blocks in Edinburgh are not going to appear anytime soon. It looks like the current conditions will continue for the rest of 2018 at beyond.”
“We had a very strong Q2 and projections for Q3 are looking positive. Rents look to continue their growth and TTL will continue to reduce through the peak period of the year. The 1 and 2 bedroom flat market continues to be busy, with properties being on the market for minutes rather than days! There is still a shortage of quality properties, driving demand up. We have embraced the adjustments in our industry and with our positive approach, this has meant that we’ve seen little change to our daily operations. We hope that quality landlords will not be put off and will continue to seek to invest in our beautiful city.”
“The second quarter of 2018 has been incredibly busy with both new investors coming to the market and a good deal of landlords formerly utilising Airbnb for short term lets coming to the longer term rental market. The threat of further regulation and other such restrictions on the short term/holiday sector can only be welcomed in order to redress the imbalance seen in this part of the market. Long term rental levels continue to rise at a moderate rate and the time to let is increasing low especially in the lower to middle levels of the market. Looking forward we envisage quarter three to be equally busy.”
“Tenants driving rent reductions? Just had our first case of a tenant who signed up for a flat with us, moved in then got a better offer elsewhere so gave notice, the reason being cheaper rent. Could this signal the beginnings of a rent downturn as we try to keep hold of tenants? Will agents be keen to make deals so that their landlords avoid the extra costs associated with marketing and new leases in order to keep the landlords business? I think this is an interesting time coming up and though properties are still scarce, tenants are getting ever more savvy, so agents need to keep on their toes!”
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