Scottish letting agents give us their views on their local market.
“Quarter 2 has seen a wave of activity in the Aberdeen rental market with a lot of people relocating to the city. Students have been early to organise their accommodation for the coming term with what looks like a record year for international students choosing Aberdeen as their base for education. 1 and 2 bedroom property prices continue to rise with some freshly renovated properties, spending a matter of hours on the market before being secured. Family housing demand in the mid-market is high, however, larger property market is a bit slower than expected. We expect demand to increase into Q3.”
“Tenant demand is trending up, as it usually does at this time of year. However, it remains to be seen if it will return to the frenzy that we saw last autumn. At Western Lettings we are seeing a rise in the number of landlords spontaneously deciding to sell up when their tenant serves notice. The cost of living crisis is prompting some tenants to downsize to more affordable properties. We have even seen several cases of owner occupants deciding to cash out and become tenants for a while, in the belief that house prices are over-stretched and due for a fall.”
“Q2 saw a measurable ‘return to normal’ with properties, particularly student properties, moving quickly. Q1 expectations that 60% of student properties would vacate, proved correct. Uptake has been very strong, with the last remaining flats expected to be let by end of June, all with June or early July start dates and no ‘rent deals’. Under-supply remains an issue, but investor activity and confidence remain buoyant, despite recent Scottish Government moves to again fix an unbroken Private Rented Sector. Rents have levelled off, and recent cost of living rises will likely temper further jumps for the foreseeable future once delayed legacy increases from Covid have flowed through.”
“The strong demand seen in Q1 continued throughout Q2, putting upward pressure on rents. The high volume of enquiries resulted in most properties being advertised for only a 24-48 hour period. We experienced the expected turnover of our student properties at the end of the academic year. Most saw a quick turnaround as students were willing to pay for the summer period even when they weren’t going to be here. Some students are also taking advantage of the summer rental period to stay and work during the Fringe, which they were not able to do previously with higher festival rents. The period has seen a lot of landlord activity. We saw a higher than normal number of landlords selling, but this was more than offset by the acquisition of new landlords.”
“The picture in Edinburgh remains one of elevated demand levels and constrained supply which is driving rental inflation across the capital, and we do not believe this position is likely to change anytime soon. This is obviously not good news for tenants and we strongly urge Scottish Government to think very carefully about further proposed changes to the PRS as landlords will be watching closely, considering their options and may well decide to sell up. The result could be a large-scale exodus of landlords from the sector which will just exacerbate the current housing crisis and add further upward pressure on rents.”
“Quarter 2 has yet again seen a surge of increased demand which we don’t see abating anytime soon. Time to let is down and there was a frenzy of activity for students taking properties during June and early July. One point to note we are seeing is an increased appetite for landlords to implement rent reviews due to the mention of rent controls and other such ill-thought-out policies. Again, there is concerning lack of research and thought by certain officials meddling in an already extremely regulated sector.”
“As predicted, we were delighted to see new landlords come to the market, by the number of new instructions in Q2. Quality properties have achieved impressive rents and do not sit on the market for any length of time. So far, we have not yet had any tenants give notice due to the cost of living crisis but this remains in the forefront of our minds. Some of our well-established landlords are choosing to exit the market due to a variety of issues like the suggested Scottish Government New Deal for Tenants, their own mortgage rates going up, along with associated expenses such as factors fee increases. As Q2 comes to a close, we are preparing for the return of the welcomed student market and so far the request for accommodation is encouraging for the coming months. With uncertainty in the sales market, we will continue to monitor the impact this may have on the PRS.”
“The market across Scotland continues to hold strong with demand high from tenants in our largest cities, Glasgow and Edinburgh. This is keeping rents at their optimum. Time to let has fallen. We are facing some challenging times ahead in the PRS with the proposed changes, combined with landlords exiting the market due to the changes. This also comes at a time when we are not building enough new homes across all tenures to meet demand. Collaboration should be a focus across sectors and government to encourage investment from single investors to institutional investors. It’s not a one size fits all demographic.”
“The dire shortage of rental properties has dominated the market picture throughout Q2 of 2022 as the surge in demand across Edinburgh has shown no sign of abating. This has been particularly prevalent with HMO properties, placing unprecedented upward pressure on rents. For a room in a great flat that pre-Covid times would have fetched between £450-600, £650 would once have been difficult to achieve. The starting point has now reached £700. While the ‘New Deal for Tenants’ threatens to exacerbate the situation further, there are positive signs of an increase in the number of new investors entering the market, all looking to take advantage of the increasing rents.”
“The trend of strong tenant demand for good quality properties shows no sign of letting up in Q2 2022. This and the end of fixed term tenancies has now ended the traditional tenant cycle for student properties starting in September and ending in May, with the three months between being made up by festival let and short terms lets. Now the new norm is for properties to be taken from June which is good news for landlords, and we are finding as a result of the current strong tenant demand that we have very few properties available for the Edinburgh festival and short term lets this year.”
“It’s been a strong second quarter to 2022 for the Aberdeen rental market and number of available properties is still lower than it has been for many years. Renewed interest in domestic oil production and the high oil price has meant that economic activity in the region is strong and will hopefully help attract new landlords and fresh investment in property. With employers facing challenges recruiting, attracting employees into the area will also depend on having quality and choice of accommodation.”
“Q2 saw a continuation of Q1 with a chronic lack of supply of quality rental property available in Edinburgh. Unsurprisingly, this is leading to tenants applying for multiple properties given that each available property is attracting numerous applicants with many being left disappointed. One and two bedroom properties continue to see the highest demand with rents steadily rising across the board. Landlords are also continuing to invest, with a large number of newly purchased properties being added to 1Let’s managed property portfolio.”
“Quarter 2 has seen a marked reduction in the number of available properties on the market. It has resulted in huge demand and limited supply and, as a consequence, rents across the board are on the increase. Time to let is reducing and many tenants are finding it impossible to even secure an initial viewing, as properties are reserved at the first viewing appointment. All this is happening prior to the usual student rush and we see that there will be a major issue once students awake from their summer holidays to find there is no stock available. We are also seeing some landlords selling up to realise their capital and get out of the letting game due to the legislation and compliance being forced on them, and what many are seeing as the PRT seemingly being more advantageous to tenants and not so much in favour of landlords.”
“The Aberdeen market continued to perform strongly during the second quarter. Properties in the west end of the city in particular are in greatest demand. This has been driven in part by increased oil industry activity resulting in expats returning to the market. Areas surrounding the city such as the Deeside corridor, Westhill, Stonehaven, Alford and Insch are experiencing high demand, particularly for family homes, however these remain a scarcity. I predict the north-east market will remain very busy during the summer, with the only cloud being the lack of stock to meet the needs of those looking for a home.”
“Rents in the capital continue to increase but higher interest rates and a strong sales market seem to be affecting the future plans of some landlords. Rising inflation and more legislation within the sector is likely to have an increasing impact on investors’ decisions to either enter or exit the market. Given the supposed existence of a relatively small number of super landlords in the capital, something like 5300 properties may simply not be available to agents, and those that are coming to market, attract fierce competition making fees more sensitive when bidding to win new business. 1 and 2 bed properties remain in great demand, with 3 and 4 beds moving quickly as well, although location remains a factor with most tenants seeking easy access to the city for work and recreation.”
“The Glasgow market continues to operate at a level rarely experienced, with demand far exceeding supply. This is leading to rental increases on a regular basis. There has been much talk about the possible consequences of the cost of living crisis but this has not, as yet, fed through into rental arrears or minimising rent increases. One of the causes of this out-of-kilter demand and supply is that landlords have left the market due in part to the ability to “cash-in” on the buoyancy of the sales market. Others have left due to frustration at changes in legislation improving tenant’s rights and it will be interesting to see if industry pressure can put the brakes on such changes.”
“With such positivity in the local Aberdeen market at present, the return of students looking to secure accommodation for next semester and further job creation in various sectors, all has contributed to the increased levels of activity and rental values achieved in Q2. With re-lets faring better than this time last year and landlords increasing rents for their tenants cautiously and modestly, taking into account the effect of increasing inflation, investing in property in the PRS continues to generate increased positive returns. Demand continues to be strong for the larger family homes and properties located in Aberdeenshire. We are also experiencing an increased presence of relocation companies looking for homes for their oil and gas clients which is encouraging for future investment in the area.”
“Q2 has seen us take on a number of new properties, an increase in tenant changeovers with summer on the way and many new tenancies commencing. Rental values continue to show an upward trend and there is still not enough supply to meet the insatiable demand. We are still sourcing new off market opportunities for our client base and are enjoying onboarding them to the portfolio and offering them to the market. Our clients are still committed to the PRS and we hope to continue to meet their property investment needs through the rest of the summer.”
“We have experienced another very busy quarter. Prospective tenants are taking proactive measures in the hunt to find properties and we are regularly visited at our Edinburgh west end office by people in desperate need of a property. Some of our student lets, which previously we were not keen to have available in May/June etc., have been snapped up within a day or two of hitting the market, with tenants wanting to hold them for a few months prior to move ins in August and September. There seems to be no end in sight for the demand.”
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