Download the full CityLets report here (Q2 2018).


Q2 has been a busy time for Edinburgh lettings. We have seen a significant increase in the number of investor clients who, unlike ‘accidental landlords’, are undeterred by higher stamp duty and are demonstrating their confidence in the sector by expanding their portfolios. Demand continues to outstrip supply, especially for one and two-bedroom flats, increasing competition between applicants and pushing up rent levels. However, the strain on this area of the market may gradually reduce as landlords are increasingly finding the short-term market is saturated, driving them to seek long-term tenants.

Jonathan Gordon, Managing Director

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Attractive opportunities for property investment

Edinburgh’s buy to let market has traditionally been dominated by ‘accidental landlords’ who retain their previous home as a buy to let after moving to a new home or moving in with a partner. These more traditional landlords are increasingly being put off by changes to the tax regime. With the new LBTT (originally called stamp duty) additional dwelling supplement adding thousands to landlord start up costs, they are more likely to sell the property instead.

Despite this, at Clan Gordon, we are still growing at a fast rate with new, and more professional, investors taking up the slack. Even with property sale prices rising fast in Edinburgh city centre, rents for high quality property are also rising, maintaining attractive yields for property investors.

Although rising costs is not so great for tenants new investors are far more likely than traditional landlords to renovate properties and improve standards.

Rents are (still) increasing

The dominant trend, which we continue to see year on year, is the steady increase of rent levels across the city. As can be seen from the table below, rents have increased across all property sizes in the last 12 months, pushing the average rent to £1,084 in Edinburgh (up 4.8% from £1,037 in Q2 2017).

table showing average rents in edinburgh 2018

Edinburgh Average Rents Q2 2018 [Source CityLets]


If we compare this to rent levels across Scotland as a whole we can see that, whilst rents are rising nationally, the increases are significantly more modest than those seen in Edinburgh. Despite rent levels increasing across the city, there has been no dip in tenant demand, highlighting the fantastic potential that Edinburgh holds for landlords and property investors. 

average rents in scotland 2018

Scotland Average Rents Q2 2018 [Source CityLets]


Although average rents are increasing, there are still many popular areas within Edinburgh where tenants can secure properties for lower than average rents. For example, the average rent for a one-bedroom property in Leith postcode EH6 is currently £669 per month. However, the average time to let in this postcode is just 17 days (compared to the city average of 23 days) suggesting increased demand in this area. 

Lack of rental stock

Rent levels in Edinburgh are largely driven by demand continuing to outstrip supply, especially for one and two-bedroom properties, of which there are simply not enough available. As the population of Edinburgh continues to grow, and some landlords are put off by higher stamp duty, it is difficult to imagine that the number of properties will sufficiently meet demand in the near future.

However, the short-term rental market is increasingly saturated in Edinburgh, as more and more landlords are tempted by lucrative holiday lets, especially during the summer months. Whilst this has historically contributed to the lack of properties available for long-term let, landlords who are struggling to achieve consistent short-term lets are gradually moving back to long-term rentals, which should lead to more quality stock being available.  There is also significant pressure on Edinburgh Council to restrict or control short term lets and the Green Party is trying to amend new planning legislation so that every every short term let or holiday home would require full planning permission.

Increasing costs (and quality) for student tenants

The average monthly rent for student properties across the city is currently around £500 per room, however, for the first time, we are seeing some HMO properties in the most popular areas achieving £600 per room or more. This is partly down to a lack of stock – students who need accommodation for next semester will pay the going rate to secure a property – but also because landlords are realising that there is a gap in the market for high-quality student properties. Students are increasingly looking for high quality properties and are willing to pay premium rents to landlords who refurbish and upgrade their property.

Despite having the biggest percentage increase across all property sizes (up 6.8% in the last 12 months), four-bedroom properties also had the lowest average time to let (just 20 days), showing how strong the level of demand is in this market.

Competition is growing between tenants

The lack of quality rental properties in the city centre has created a competitive market, where multiple tenants apply for each property. Edinburgh landlords can now, in most cases, take their pick of tenants as properties are snapped up within days of being advertised. The average time to let across the city is 26 days, although at Clan Gordon our current average is time to let is just 11 days (July 2018), demonstrating how quickly properties are being let.

Tenants have the potential to drive up standards

Although the cost of renting and competition for properties is going up, tenants will hopefully begin to see that the quality of properties available is also increasing. The introduction of the Private Residential Tenancy (PRT) in December 2017 means that tenants entering into tenancies from that date can give 28 days’ notice to move out at any point from the first day of the tenancy. Fair rents and quality properties will both be factors in encouraging tenants to stay in a property long term, so landlords looking to avoid continuous tenancy changeovers and potentially costly void periods will be more likely to make improvements.


The Edinburgh lettings market continues to go from strength to strength, providing excellent opportunities for existing landlords and those considering investing in Edinburgh property. Contact our expert team to arrange a free rental valuation, or to discuss current on and off-market investment opportunities.

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