Scottish letting agents give us their views on their local market.
“Aberdeen’s rental market through Q4 has seen a massive reduction in available stock with the influx of tenants to the city from students, working professionals and international relocations. Rents are steadily recovering and the supply of 2 bedroom properties is reducing to pre oil crash numbers. We are starting to see the market for large family properties increase in both supply and demand, which has been long awaited. Enquiries, which are still high, are starting to slow as we approach the festive period. Modern and refurbished properties continue to outperform average rentals significantly with dishwashers and storage being at the top of tenants’ wish lists.”
“It is currently a very exciting time to be a letting agent as despite the uncertainties in the economy, the impact on the rental market has been negligible and it’s very much business as usual with almost all our stock currently let at good rents. The recent interest rate rises are starting to have an impact on the sales market which has slowed dramatically, meaning we are getting an increasing number of enquiries from new landlords looking to benefit from the strong rental market in order to hang onto their investment. Although the recent ban on rent increases was of concern in the way it was announced, in reality mid tenancy rent increases are usually fairly modest and it is when there is a change of tenancy that rent increases are more significant, and thus the vast majority of landlords are unaffected by the ban.”
“Autumn has seen demand for 1 and 2 bedroom properties ease slightly from the 100+ enquiries per property in August/September, but still high. Rents remain strong as a result and average tenant lease lengths are continuing to increase. Student/HMO type properties have all let, yet demand is still high as city HMO numbers have reduced from c. 7,000 to less than 5,000 (source: CEC) in recent years. Overall, we continue to see occupancy levels of over 98% across the portfolio we manage. Investor activity has eased in response to tightening fiscal and monetary policies.”
“Three points highlight the way the Aberdeen market behaved in Q4 2022. First, a clear demand from corporate tenants for properties in AB10 and AB15 (West End and Cults/Milltimber area in broad terms), which has led to an increase of rent above average and reduction of the Time To Let (TTL) in these postcodes. Second, a very low stock of good quality 1 and 2 bedroom properties in town, which has translated in these properties being snapped in hours when they go on the market. And third, a wave of tenants extremely savvy when it comes to energy efficiency, which means that properties with the best EPC ratings (A to C) enjoy a premium rent. Sustainability and growth are the words for Aberdeen in 2023.”
“The Edinburgh market continues to be very strong for tenant demand. We have seen a decline in tenants visiting our office in desperate need of a property, but are still finding viewings are filling up quickly when we list new properties. Increasing rents are starting to mean that tenants often now require a guarantor in order to pass affordability calculations. We have seen a few tenants get in touch confused with the recent rent control and eviction bans, there appears to be mass misunderstanding from the poorly communicated or thought out polices from the SNP and Greens.”
“Glasgow and Edinburgh still have a huge demand for all types of properties. Properties are taking slightly longer to let but this is purely down to the festive period. The introduction of the rent increase and eviction ban has raised questions but that said, we are continuing to work with new clients who wish to enter the sector and current clients looking to expand their buy to let portfolio. Many landlords are also taking the opportunity to upgrade their properties in between tenancies and we anticipate this area will only get busier next year with landlords upgrading internally to improve their energy performance ratings. Our pipeline for January and February is a very positive sign to the start of the new year.”
“Demand levels for rental properties in Edinburgh remain extremely high. All properties we are advertising see multiple applicants. It is hard for a tenant to find a rental property in Edinburgh. The Scottish Government’s Cost of Living (Tenant Protection) (Scotland) Act 2022 is not helping the matter. A lot of landlords are being put off letting as a long term investment. We hope the new changes in the law around short-term lets may start to see some new long term rental stock. Short-term lets operators have until April 2023 before they need to apply for a licence, so this will take time.”
“It has been a very busy quarter with more new clients than ever before. The source of new clients has been mixed but for the first time in years we have seen clients who tried to sell their property take it off the sales market through lack of interest. This was something that helped us get going as an agent back in 2008 and may be a sign of things to come, with the recession and many predicting the property sales market will fall over the next 12 months by 10%. On the tenant demand side this has been really strong in October/November but we have seen less interest in December as things wind down for the year.”
“Where did 2022 go? Letting in Aberdeen has seen another very busy quarter with stocks across the city at low levels that we haven’t seen for several years. Rents for properties coming back onto the market are rising and there is another influx of students due in early 2023 to add to the demand. The cost of living crisis is likely to mean more people have to rent for longer, so encouraging good landlords to stay or enter the letting market is key to keeping a strong supply of property and ensuring the quality and affordability on offer.”
“We end an eventful 2022 with a definite slowing of the market. Demand is still high and continues to outstrip supply, but the gap is beginning to narrow. We are seeing the current cost of living situation begin to ripple into the PRS with tenants seeking cost effective and energy efficient homes. Rents are still holding firm for the time being and are still considerably higher than the same time last year but the PRS is certainly beginning to feel the pressure of the current economic climate.”
“In Q4, we have seen the sales market slow right down and as such, properties destined for sale have been brought back to the rental market. This influx in availability has meant that rents have softened slightly and TTLs have modestly increased. With the cost of living crisis at the forefront of peoples’ minds, we have seen a higher demand for more affordable properties. High-end properties have lingered on the market a little longer than usual. Landlords are seemingly concerned about their own cost of living and with the added pressure of the costs associated with their investment (rising mortgage interest rates, maintenance costs, etc.), some are questioning continuing within the PRS.”
“We have found that despite rather gloomy market predictions, the last quarter of the year has been busy with new landlords looking to let. This reflects the acute shortage of available property to rent perhaps made worse by the increase in mortgage rates, keeping would be first time buyers in their rental properties longer than expected. About 16% of landlords are aiming to sell their buy to lets, creating further pressure on the market for 2023. One interesting trend seems to be that tenants are looking for studio flats which could be a big growth area in the future. Tenant demand is up by 20% so we are hopeful the supply chain will respond positively next year.”
“The last quarter of 2022 has seen significant demand and a further lack of stock driving rental prices upwards. The continual assault of the Scottish Government on landlords has been the contributing factor to the current housing crisis. Until someone with actual credentials is appointed, rents will continue to rise and landlords will continue to exit the market. The uplift in ADS from 4 to 6% could be seen to be one more nail in the coffin of the PRS in Scotland. We are currently running at 98% occupancy, with little to no voids between tenancies and rents rising further still.”
“Edinburgh remains strong for tenant demand with properties still letting well. As we enter the winter months, we wait to see how the cost of living crisis will impact the market. Edinburgh faces the new short lets legislation which is going to severely impact supply after 1 April 2023. We are nationally facing a housing crisis and this, along with the Cost of Living (Tenant Protection) (Scotland) Bill, is a concern as to where the properties are going to come from to meet demand. We require to see positive solutions to aid more housing across all sectors.”
“Tenant demand has reduced as we head into winter, which means that those looking for a place to rent have some choice. Falling house prices have had a dampening effect on the exodus of landlords from the sector. It remains to be seen what impact the rent freeze will have on rent levels, as landlords are still permitted to increase rent when re-marketing properties. Tenants are coming to the realization that they can keep a lid on their rent by not moving home. As time passes, this will become a significant factor, with tenants balancing their need to move with their desire to keep rent payments manageable.”
“Demand remains high and with a few tenants giving notice, moving on to bigger and better things, tenancy turnover is positive and has allowed some rental increases between tenancies. The usual festive lull hasn’t happened yet so it is great that we can continue to offer quality homes to new tenants. We haven’t really felt impact of the rent freezes and eviction ban as yet, nearing the end of Q4, but it will be interesting to see what happens come spring/end of Q1 2023. With more properties due to come onboard, we are hoping for continued growth and property availability.”
“After the frenzy of August and September, where the influx of new students created headline news and government legislation, the rental market has settled down to more manageable levels. Monthly rents have slowed from their period of rapid growth, but this has been because of market conditions, not government action, as this only impacted upon rents for existing tenants. The announcement from the First Minister of no rental increases and a moratorium on evictions, and the delay between the announcement and legislative provision caused concern and confusion for landlords and tenants alike. Hopefully, such knee-jerk responses to freak market conditions will be replaced in the future by consultation and long-term planning.”
“The market continues to show resilience in the face of headwinds caused by the cost of living crisis and inflationary pressures. There remains a significant supply demand imbalance, with stock levels remaining at historically low levels. This means competition for a place to live amongst tenants remains fierce and shows no sign of diminishing, thus upward pressure on rents for new tenancies is likely to continue.”
“We have seen demand in Q4 cool as we move towards the festive period but it is still relatively strong for the time of year. Viewings for central properties are still oversubscribed and the average time to let remains low. The market remains difficult for students who continue to search for accommodation for the academic year that started back in September. Our landlords are expressing concerns about the inability to increase rents as their costs increase with their fixed term mortgages coming to an end. We wait to see if the emergency cost of living legislation is extended beyond the end of March 2023, but our expectation is that it will be for at least a further six months.”
I am a Tenant Landlord
