Scottish letting agents give us their views on their local market.
“Q4 is traditionally a quieter time and this year is no different. There is an increased amount of demand than previous years though, with stock levels still on the low side. Larger family homes are still hard to come by. We have, however, seen a number of landlords return to the rental market, concerned with their properties not selling, but buoyed by increased rental values and reduced TTLs than we have seen over recent months. Aberdeen recently securing around 200 civil servant positions has been a welcome investment and we’ll likely see increased activity into the New Year.”
“Edinburgh as a location remains well insulated against wider economic shock and continues to be a draw for people to come to live and work in the city with the population forecast to grow further. This will add further pressure across all housing tenures in the city. The rental market is being shaped by a deepening supply and demand imbalance which will be a key factor underpinning rental growth across the city over the short to medium term. But the rates of growth we have seen are ultimately unsustainable and questions around affordability will need to be answered.”
“1Let continued to see very strong demand for rental property. However, as Q4 moved towards Christmas, demand for higher rent properties began to tail off with a marked difference in TTL between properties at the higher end and lower end of the rental spectrum. Feedback on this trend determined the cost of living crisis beginning to bite and affordability becoming an issue for some. Investment in property is still largely coming from cash buyers, both in UK and abroad. Many new properties 1Let are marketing are coming from the short term let market with landlords choosing to switch from holiday lets to long term rentals.”
“Demand for rental accommodation in the central belt has never been higher. This record demand for rented accommodation is fuelling the continuing increase in rents on change of tenant. Good quality rental properties are being snapped up by incoming workers and students in record time, void periods between tenancies are almost non-existent and average tenancy terms are getting longer as tenants are choosing to move less often. Circumstances couldn’t be better to be a landlord as yields on capital outlay are exceptional and are combined with forecast growth in asset value.”
“The supply of one and two bedroom properties has diminished to the point where large numbers of tenants are failing to secure accommodation in the capital. There are no obvious signs that buy to let landlords are expanding their portfolios so the market is dependent on circumstantial landlords and in particular those who are currently renting their properties in the holiday/short term market, and who may switch into long term rental during 2024.”
“What a change a quarter makes. We expected demand to reduce in Q4 as we moved into the festive period, but the drop off in demand from the middle of November happened earlier and more dramatically than expected. Stock levels are currently high, time to lets increasing and rent levels cooling. We expect the usual uplift in demand in the New Year and stock levels to reduce again. From a legislative perspective, we’re eagerly awaiting clarification of what, if any, rent restrictions will be in place from the 1st April 2024. It appears from the new consultation on minimum EPC requirements that the government will take a more pragmatic approach which is positive.”
“Q4 has continued the trend for the year with a higher demand than supply which in turn is causing the rental values to increase. One and two bedroom properties are still in high demand with multiple applications being received for each property, making it extremely difficult for tenants to secure a property. The financial difficulties caused by the increased interest rates on mortgages is encouraging people to rent instead, until the sales market settles down.”
“The trend continues – low TTLs - particularly on properties priced under £1,500, high rental prices and there remains insufficient stock to meet the demands of the market. There has been a slight seasonal slowing, but very much business as usual and investor interest remains from both new and existing clients. We are all anticipating the governments next steps and what will happen in 2024, and that aside we continue to work hard for our clients to look after and maintain their investments.”
“Although the Scottish Government has the private rented sector on tenterhooks while we await the latest legislation changes, the sector is still necessary and busy. With demand for housing high, admittedly not as high in the summer months, we are still welcoming new landlords to the industry who have chosen to invest in the private rented sector. As the colder winter months come in, we are hoping that the previous guidance to tenants about keeping heating on low to prevent pipes freezing and energy efficiency measures will mean that our tenants stay warm and safe in their homes.”
“Q4 has seen a focus on 1 and 2 bedroom flats (common after the autumn student move-ins). Rents in this sector have seemingly stabilised, but in reality have just eased from going up as much as the previous 3 years. New listings continue to see very high demand and will likely continue to do so whilst new supply is deterred by poorly conceived housing policy. The judicial reviews against the legality of the short-term let policies in Edinburgh have wider ramifications throughout Scotland, meaning less new stock coming via that route than previously expected. 2024 will likely look similar to this year re supply/demand and rent trends.”
“After two years of demand for rental properties significantly exceeding supply, we are finally seeing demand levelling off and rents stabilising as landlords look to avoid having a void over the Christmas period. Our stock of properties is still remarkably close to fully let, however, when properties do come on the market, the rental demand is closer to historic levels rather than the excessive demand that we have experienced over the last two years. Hopefully, this improved balance of supply and demand will lead to a more sustainable rental market going forward.”
“After yet another fast paced, record-breaking quarter in Edinburgh lettings, we have seen a notable slow-down in the run up to the end of the year, particularly in the higher price point properties. There has been less urgency from tenants as a result of more choice available in this traditionally quieter period. However, 1 and 2 bed properties below £1000pcm are still generating loads of interest, and I fully expect the rest of the market to pick right back up to the record highs at the start of the year and throughout 2024.”
“The Edinburgh rental market is a complex and ever-changing landscape. The high cost of rent still remains a challenge. This trend is attributed to a combination of factors, including the city’s growing population, limited supply of rental properties, and the increasing popularity of Airbnb and other short-term let platforms. With more people competing for fewer available homes, rental prices have inevitably risen and as a result, finding affordable accommodation can be very difficult.”
“Whereas, we have always had a good retention of investment landlords, the Scottish Government’s relentless legislation is having a negative impact. More landlords are leaving the market, further exacerbating the supply for tenants looking for accommodation. In particular, the likely introduction of a restriction on rent increases between tenancies is of concern. This appears very unfair, especially where landlords have kept rents low, as they will be further disadvantaged by this legislation. Perhaps allowing incremental increases in line with inflation with a minimum rent of the local housing allowance would provide some balance for those most affected.”
“Q4 has been a tale of two halves. First half saw the continuation of excess demand and fairly restricted supply resulting in rental prices driven to historical highs for all property types and locations in the city. The interesting change in the market started early November when we noticed a drop in tenant enquiries and increased numbers of properties available. It must be noted that these changes are relative to levels of tenant enquiries we have never experienced before, and feel this could be the first step towards the market finally normalising post-COVID. There’s no doubt that seasonality is playing its part for the first time since 2019.”
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