Clan Gordon Rounds Up A Year Of Change For Edinburgh Property Lettings

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2022 has been a year of big changes for Edinburgh’s landlords.  From a new short-term let licensing scheme to emergency legislation to freeze rent increases, there’s been a lot for landlords to get their heads around.

As Edinburgh’s leading letting agent, we’ve been offering guidance and advice throughout the year to both landlords and tenants. With more than 15 years experience in the local lettings market, we‘ve steered our clients through many a storm and made sure they’re equipped with the information they need to make the right choices.

In this blog, we look back over 2022 and review the major changes for the Edinburgh property market…

Short-Term Let Licensing Scheme in Edinburgh

The Scottish Government passed an act earlier this year requiring local authorities to regulate short-term lets through licensing schemes, and the City of Edinburgh Council’s Licensing Scheme came into effect on 1 October.

All short-term lets in Edinburgh must be licensed by July 2024, with existing landlords required to register by 1 October 2023. This was extended from the original deadline of 1 April 2023. The Government website outlines the full details, and one of the biggest changes for Edinburgh landlords who let their entire property is the requirement to apply for planning permission for change of use from residential to short-term let.

There is an assumption that tenement flats with shared entrances, which make up the majority of the Edinburgh’s Airbnb stock, are unsuitable as short-term lets due to the likelihood of nuisance and anti-social behaviour in communal spaces such as hallways and stairwells. This means many landlords with short-term holiday lets in Edinburgh will be looking for new options for their properties in the coming months.

The new scheme also introduces stringent safety requirements similar to those required for houses of multiple occupation (HMOs) and in excess of those needed for long-term lets.

Clan Gordon has advised landlords whose properties don’t comply with the requirements of the new scheme to consider long-term lets in Edinburgh as a way of securing a reliable regular income. Schedule a call with our property management experts for current rental market insight for the city.

Emergency Legislation to affect Edinburgh landlords

In October, the Scottish Government introduced emergency legislation that capped rent rises in the private and social sectors at 0% until at least the end of March 2023 and made evictions unlawful in most cases for the same period.

The legislation was designed to protect both tenants and landlords who were impacted by the cost-of-living crisis, but it was met with criticism by leading bodies in the rental sector who said it was rushed through and poorly thought out.

The cap also applies to student accommodation, but rents can be increased for new tenancies. Landlords are also able to apply to Rent Service Scotland to increase the rent on a property to cover up to 50% of either increased mortgage interest payments, an increase in property insurance or rises in service charges paid as part of a tenancy.

It’s possible the legislation will be extended for a further two six-month periods next year. Clan Gordon can offer expert advice to landlords who are impacted by this change.

Interest Rate Rises On Buy-To-Let Mortgages

Landlords with variable rate mortgages or those looking to remortgage were hit by a string of rises in the Bank of England base rate throughout 2022.

The instability of the financial markets meant many lenders withdrew mortgage products or offered less favourable terms for new mortgages, with borrowers left contemplating the best move.

Interest rates look set to continue on an upward trajectory in 2023 so if you’re a landlord with a mortgage, it’s worth taking professional advice to ensure you have the best possible deal in place.

Energy Prices affecting tenants and landlords alike

Rising food and energy bills mean there’s less money to go around every month, and rocketing gas and electricity prices will really bite during the winter when people will have to make tough decisions about heating homes.

The Scottish Government website has a benefits calculator where you can add your details and find out what you can claim. It also has details of grants such as the £650 cost of living payment, £300 winter fuel payment and Scottish Welfare Fund.

Rental market remains strong

While all may appear doom and gloom for Edinburgh landlords, the good news is that the rental market in Edinburgh remains stronger than ever, and we do not anticipate this changing anytime soon – with surging demand for city properties continuing to outstrip supply.

At Clan Gordon, we have a wealth of expertise to share with landlords and tenants who are struggling with any of these issues. Schedule a call with one of our advisors for a no-obligation chat to find out how we can take the hassle out of letting a property in Edinburgh.

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