Residential rents hit record high in post-pandemic surge in demand.
The appeal of living in the Scottish capital has been reignited, with new figures showing a resurgence in demand for city properties that has pushed rents to record highs.
Figures also show that the average Time To Let (TTL) – the period a ‘for rent’ sign is displayed at the property – is just 16 days, lower than the Scottish national average of 18-25 days across one, two, three and four bedroom properties.
Thomas Ashdown, Managing Director of Citylets said: “City living is back. During the pandemic growth slowed in most cities and accelerated in surrounding areas.
“Now people are back to office working, at least at some level, and seem confident there won’t be any more full lockdowns. The appeal of the city lights appears to have endured some extreme disruption, it would seem.”
However, he pointed out that letting agents remain concerned about the supply of available properties in the private rental sector, with many landlords continuing to sell up while the market is buoyant – or to avoid the threat of increased regulation and the costs that will bring.
The Citylets quarterly report for the first three months of 2022 shows demand for rental properties across Scotland exceeded supply in both rural and urban areas. However, the numbers of available properties was slightly higher than the historic lows reported the last quarter of 2021.
By postcode Edinburgh’s rental hotspot for one-bedroom properties was EH16 (including Cameron Toll, Craigmillar, Liberton) where the TTL was only seven days, while the TTL for two-bedroom properties in EH14 (including Slateford, Longstone, Wester Hailes, Balerno) was an average of only nine days.
At the top end is the EH3 region (New Town, West End, Tollcross and Fountainbridge) which has the highest property prices throughout Scotland, averaging £1,001 for a one-bedroom, £1,482 for a two-bedroom and £1,923 for a three-bedroom property.
Mr Ashdown said: “Despite relentless economic worry and the conflict in Ukraine that will further impact on the cost of living, the market is very busy. People want to get on with life and make decisions now which may have been postponed in recent months.
“While there is slightly more supply of properties than there was at the end of last year, it’s not a widespread phenomenon and this is not something can always be addressed quickly. The consequence of that is, with no sign of demand reducing, rents may continue to rise throughout 2022.
“While it’s reassuring to see that cities are coming back to life, rent rises of this order are likely to prove problematic for many, given the ongoing cost of living crisis. This is not a discretionary purchase – you have got to have somewhere to call home. More choice in the sector and indeed more widely in housing would, of course, help.”
Charlie Inness, of Edinburgh letting agent Glenham Property said: “Edinburgh has moved from an
oversupply of stock to one of a severe undersupply with high tenant demand and unprecedented activity levels.”
He added: “Properties are letting extremely quickly with multiple applications received for each listing. We do not expect the shortage of supply to change as investors are either exiting the market or are cautious of entering due to the uncertainty created by the Scottish Government’s proposals for increasing regulation and artificial control of the sector. Due to this, we expect upward pressure on rents to continue to the detriment of tenants.”
The figures highlighted in the quarterly report show that available properties were being snapped up rapidly in Edinburgh, with 39% of properties let within one week and 84% taking less than a month to be let.
Jamie Kerr, of Edinburgh’s Ben Property said: “Quarter 1 of 2022 has seen an extraordinary surge in demand across Edinburgh and strong rental levels are being achieved with a short time to let.
“However, while the market is extremely busy and properties are letting faster than ever, there is a worrying lack of supply across the board which should be a wake-up call for the Government.
“There needs to be more investment in social and build to rent housing, and a deeper understanding of the vital role played by the private rental sector, encouraging private landlords and investors, not discouraging them. Only this can redress the balance of supply and demand and calm rental levels accordingly.”
Citylets operate a residential lettings site with over 50,000 properties per year from over 400 local agents. The Citylets quarterly rental report was launched in 2007 and has since become a respected guide for housing professionals including social housing and public policy makers.
The report and associated rental maps are available for download at Citylets Rental Reports.