Rental Market Update November 2021
For the Edinburgh rental market, the contrast between where we were last year and now is stark. 18 months ago, as Covid-19 restrictions really took hold, the rental market experienced a testing time where available stock sat at historically high levels, fuelled by a stagnant transitory client base with low public confidence and ultra-strict restrictions on movement and viewings alongside a sudden influx of short term let properties onto the market as the 'Airbnb' market faltered.
Fast forward 18 months and the picture could not be more different.
Current demand is overwhelming. Month-on-month we've seen a continued reduction of rental supply to record low levels (but it looks like this trend is beginning to stabilise). Many Lettings firms are reporting that the number of enquiries that they are receiving for each property are at a level at which they are literally unable to administrate and property listings are having to be removed from the market after days due to sheer demand.
Presently, the strongest part of the market remains in 3/4 bedroom Houses of Multiple Occupation (HMO) properties in areas popular with students as students return to the market in droves. Rental 'times to let' are historically very low with Student accommodation leading the way but on average across the whole market, the data shows that flats are renting out 16 days quicker than the same time last year. (Source: Citylets)
From an investor point of view the data is extremely promising.
Source: Umega Lettings
What then for the future?
"Early signs are that rents will continue to climb from their current historic high of £1,157/month, with rents for 1 and 2 beds expected to contribute, returning to year on year rental growth". (Umega Lettings)
As sales prices rise with some economists predicting 20% growth in Scottish house prices in the next 5 years and demand for housing intensifying as more and more people enter the already overcrowded market, the slow but sure trend toward a society of renters rather than owner-occupiers continues to gather pace.
This is sadly putting unprecedented pressure on the pockets of tenants but clearly it's only good news for landlords and BTL investors.