As 2018 progresses, the influx of landlords switching their property from short-term to long-term let accelerates. This is partly due to difficulty securing lets consistently in a saturated market, and landlords realising that, despite the promise of prime rents, the income generated is not significantly more than that for long-term lets (due to higher outgoings and the seasonally influenced market). Despite this, lack of quality properties remains an issue, with numerous applications for each, particularly 1- and 2-bedroom flats. Landlords are responding to tenant demand by upgrading their properties, especially important since the introduction of the PRT.
Jonathan Gordon, Managing Director
Property Investment Advice
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Rent levels in Edinburgh reach (another) all-time high
Increasing rent levels is a trend that we see time and time again, with average rents in Edinburgh reaching another all-time high in Q3 of £1,107 (up 5.6% from £1,048 in Q3 2017). In comparison to Scotland as a whole – where the average rent is £789 – there is no denying that rents in Edinburgh are increasing, however, increases remain relatively modest.
Tenants remain undeterred by higher rents
The ongoing lack of rental stock in Edinburgh is a central reason for rent levels steadily increasing. However, despite rents going up, the average time to let in Edinburgh is 21 days, and 76% of properties are let within a month. In comparison, the Scottish average time to let is 31 days, and 61% are let within the first month of being advertised, demonstrating that higher rents are not hindering tenant demand.
How different areas of the country compare:
|Average rent||Average time to let||Let within a week||Let with a month|
Competition remains high for one- (and two) bedroom properties
Within Edinburgh, one- and two-bedroom properties continue to rent quickly despite average rent levels increasing by 4.4% (one bed) and 6.8% (two bed) in the last 12 months. One-bedroom properties in Edinburgh are taking an average of 17 days to let, with 35% letting within a week and 83% within a month of advertising.
The below comparison of one-bedroom properties shows varying rent levels and time to let across the city. These figures demonstrate that rent per month may not be the only important factor for tenants when looking for a new property, as lower rents do not necessarily mean renting faster. In addition to location and rent level, tenants are also likely basing their search on the quality of the property and how well it is presented for viewings.
|Average time to let||Average rent|
|Old Town||11 days||£786|
Although competition remains high between tenants – with properties each receiving several applications – the market will most likely slow down as we approach the Christmas period.
Rents for four-bedroom properties have increased by 10.8%
The average rent for a four-bedroom property in Edinburgh is now £2,003, up 10.8% in the past 12 months (and 53% in the past decade). Despite this increase, the average time to let is currently 29 days, 3 days faster than it was this time last year, showing increased demand for properties of this size.
Four-bedroom properties in the city centre tend to be HMOs, which are predominantly rented to students. For the first time this year, we have seen student properties regularly demanding £600 per room (per month). This is partly due to 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.
As can be seen from the latest CityLets report, the Edinburgh buy to let market continues to go from strength to strength, providing a great opportunity for property investors. The Private Residential Tenancy has given tenants more control over their tenancy and this will (hopefully) help to drive up standards across the market.
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