After months of uncertainty, it looks like Edinburgh’s private rental market is stabilising, and properties that were once used as holiday lets are gradually moving into the long-term rental sector, making more homes available to tenants. 

This boost to the capital’s rental stock is much needed, but there is still a huge gulf between supply and demand for all property types. Indeed, even student accommodation is hard to come by, and many occupants of HMOs either stay put or pass rooms on to friends, keeping them off the open market. 

Rents Continue To Rise In Edinburgh 

According to the latest Citylets Market Report for Q2 2024, monthly rents across Edinburgh continue to rise, with a new average high of £1,574 – an increase of £93 since the last quarter and a 6.6% hike since this time last year. 

Four-bedroom properties have shown the steepest rent rise in recent months but the city’s ongoing imbalance in supply and demand means all property types are amongst the most expensive in Scotland. This is unsurprising given a combination of factors – Edinburgh is one of the most desirable cities in the world to live in and offers a host of annual events and attractions, as well as stunning scenery and great transport links. 

Edinburgh Tenants’ Have High Expectations 

For letting agents, the competitive nature of the market means they need to offer high quality properties at the right price to meet tenants’ expectations. 

Hannah Doig, Clan Gordon Business Development Manager, said: “The private rental market remains robust, with Clan Gordon securing all types of new properties monthly. Many landlords are now opting to travel, work abroad or transition from short-term rentals following the legislation announced in October 2023, boosting property availability on the long-term market.  

“While achievable rents are still favourable, the market is stabilising due to increased listings. Tenants are increasingly demanding high-quality properties, pushing landlords to invest in upgrades, which is a positive trend. High-quality properties attract quality tenants ensuring a healthier market.” 

Time To Let Decreases Across All Property Types 

The time it takes to let properties is a good indication of the state of the market and, in Edinburgh, this has decreased across all property sizes since the last quarter, indicating a faster-moving market. On average, properties are now being let within just 22 days, a significant reduction from the previous quarter – 78% of four-bedroom homes are being let within a month compared to 38% in Q1 of 2024.   

The reduction in time to let clearly indicates the high demand and competitive nature of Edinburgh’s market. Landlords benefit from quick lets, but tenants may find it hard to secure properties. They are advised to register with agents and get all their documentation in order, so they’re ready to proceed as soon as they find somewhere they like.  

Looking Ahead In The Capital’s Rental Market 

The latest Citylets report suggests that the capital’s rental market is likely to remain under pressure, with rents continuing their upward trajectory but perhaps at a slower rate than we saw last year.  

Where increases have been put in place by landlords, most tenants seem to have accepted the rise. This could be because many rents have been below market rate for the past couple of years due to the rent cap put in place by the Scottish Government to tackle the cost-of-living crisis.  

This reduced rent increases to a maximum of 3%, except in exceptional circumstances, and was in force until 1 April 2024. Rents can now be increased by up to 12%. However, a complex tapering system is now in place, and the Scottish Government has provided an online calculator to help landlords and tenants understand what is acceptable. 

No doubt, the combination of limited supply, high demand, and economic factors such as inflation and interest rates will play a crucial role in shaping the market’s future in the coming months. 

At Clan Gordon, we take the headache out of letting your property by providing a comprehensive property management service. This means we are always available to provide advice and guidance on any necessary rent reviews to ensure your property stays in line with the market, while remaining balanced against the benefit of retaining high quality tenants. 

For no-obligation advice about Edinburgh’s private rented sector and how that could impact your experience as a landlord, arrange a call with one of Clan Gordon’s expert property managers.