Scottish letting agents give us their views on their local market.
“Q2 has seen a slight correction to the market with extended time to let due to a large number of properties on the market. Whilst demand is still strong across all sectors, the student HMO market has seen greater void periods as prospective tenants assess the best properties suited to them. The PRS is still suffering from interference by the Scottish and UK Government and until there is a material change in how the sector is viewed rents will continue to rise as supply decreases. It is perhaps time for only those with the credentials to get involved at government level to kick start further investment for the future.”
“Demand for our properties picked up in Q2 2024, for what is now our busiest quarter of the year. Most of our HMO property stock did not even reach the market as existing tenants either stayed on or their friends contacted us directly to take these properties. For non-HMO properties, rents are down slightly from this time last year when there was a chronic shortage of properties on the market. Thankfully we are seeing an influx of new landlords from larger agents look for a more personalised service but we are also seeing landlords selling up due to a combination of political uncertainty, increased borrowing costs and consistently changing legislation.”
“Rent increase capacity at the start of Q2 with the removal of the rent cap has driven rental increases. Although limits are still effectively in place, it has allowed us a fairer review for clients and tenants alike aligning rents closer to market value. Rents remain high and TTL low between tenancies and the demand remains huge. Spring has seen short-term let and investor clients coming to us, with steady growth in our portfolio and only a couple of clients opting to exit the PRS. With the busy summer months ahead we hope the portfolio growth trend continues.”
“Edinburgh’s rental market remained firm throughout Q2, with 1 and 2 bed rents solidly stabilising at just below late 2023 peak levels, and with no sign of diminishing. The annual HMO student property market activity was extremely strong, with circa 8-10% uplifts in open market rents above 2023 prices, with premium properties now circa £750+ per room. This has piqued investor interest again, despite ongoing shifting political sands. Recent reports suggesting that there is unmet demand of over 17,000 student beds in the city is concerning, as the direct and ripple effects of this through the market will only serve to further fuel rental values and exacerbate the current housing crisis. However, the only true solution of ‘build more homes’ desperately needs better joint public and private sector cohesion to resolve it.”
“Q2 was a very busy period, for both tenants moving in and out of properties and for seeing an increase in tenant demand for properties. This has seen our time-to-let reduce from Q1 (and especially from Q4 2023 which was particularly slow) and even though there was a high turnover of properties coming to the market, we would only have a small number available at any given time. Rents have largely been stable for all property types and we hope throughout the remainder of 2024 that this stabilisation continues.”
“The residential rental market in Leith, Edinburgh has generally seen a year-on-year increase with demand increasing in a similar direction. Recently we’ve seen limited supply with landlords exiting the market keeping rents at an all-time high and vacant properties being snapped up within the first week of viewings. Leith continues to attract a huge demand for rental properties and we expect the rents to remain high during this next quarter. We’ve noticed that many tenants are choosing to stay longer in the area, which could be due to the security of their current rent levels being lower than market value.”
“Q2 2024 returned to pre-pandemic trends with high turnover of student properties but good demand and low TTL. With the relaxing of government rent restrictions, a large amount of time was spent reviewing rent levels, issuing rent increase notices and communicating with tenants and landlords. The complexity of the new tapering system generated lots of questions. Following the issue of rent increase notices, we saw an increase in tenants serving notice. Until now tenants have been reluctant to move as they have been taking advantage of their below market rent levels. We expect turnover to remain at pre-pandemic levels through 2024, demand to stay strong and for rents to stabilise.”
“The market is in full swing with demand high for properties. Properties advertised at the right price will let and those that are top heavy will take longer to or need adjusting downwards. There is still a shortage of HMO properties with many students left disappointed. This is echoed over the two major cities, Edinburgh and Glasgow. Many landlords are taking the opportunity to implement rent increases having been restricted over the last couple of years. This time of year would normally see more notices as its peak move time. It’s too early to say if this relates to rent increases or not.”
“In alignment with the findings of the Scottish Government’s housing market review we have seen rents increase markedly since April although we may now be experiencing a levelling off as the market stabilises. New landlords are certainly more difficult to source and those that remain are placing more emphasis on keeping good tenants in their properties for longer. So with reduced movement the acute shortage of new property is not quite as big an issue as it first seemed. That said, one and two bed flats are finding tenants almost immediately and the hope is that investor confidence continues to return during the remainder of the year.”
“This quarter has been interesting. Following the end of the ‘Cost of Living Act’ landlords could increase their rents once again with not all landlords opting to do so. At Glasgow Property Letting we have seen minimal tenancies vacated due to increased rents. We have continued to see demand out pacing supply of rental properties, resulting in very healthy numbers of enquiries for the majority of marketed properties. The trend of new younger landlords stepping into the shoes of older landlords who have chosen to retire from the PRS continues, as new landlords have only known the PRT format and are in general more accepting a 28 day notice period given by tenants, discretionary grounds for eviction and having no fixed term contracts.”
“Q2 2024 has been dynamic for Edinburgh’s Private Rented Sector (PRS), influenced by the abrupt end of the Bute House Agreement and the general election. This political uncertainty keeps the housing market in sharp focus, a trend likely to continue into Q3. A continued trend is landlords exiting the market with mortgage renewals due to increased costs. Conversely new entrants, mainly cash buyers, are benefiting from a slower sales market, targeting yields over 6% in prime locations. Despite the Additional Dwelling Supplement and reduced mortgage interest relief, landlords with minimal debt and well-maintained properties are enjoying robust rental rates. Demand remains high for one to two-bedroom units.”
“Since April, we have rolled out moderate rent increases. The vast majority of tenants have accepted the modest increase, safe in the knowledge that a similar property on the open rental market will be much more expensive. As spring comes to an end and we enter the summer months, tenant enquiries and viewings are continuing to ramp up so we expect a busy season ahead. As demand continues to increase, rents are increasing too. In regard to new business, we were delighted to add a string of quality properties to our portfolio. Some existing landlords have left the market but this has slowed somewhat thanks in part to the stable Bank of England interest rate and decreasing inflation.”
“Edinburgh continues to act as a strong draw for people to come and live and work; as such, demand for housing across all sectors will remain high. Market fundamentals within the PRS remain strong. Though recent data showing increasing TTL figures does point to a slight cooling in competition for rental stock from the frenzied levels we have experienced since the pandemic. The result is we have probably reached peak inflation as upward pressure on rents has relented which should mean a slowdown in the rate of rental price increases and a return to a more stable and sustainable market.”
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