Investing In property in edinburgh
Growing pressures on private landlords such as new government restrictions on short-term lets and tougher energy efficiency requirements have been predicted as potentially creating a massive shortage of rental properties in Edinburgh.
However, the city’s leading letting agent Clan Gordon believes the current climate is a great opportunity for investors to capitalise on the strong property market and on existing landlords selling up to opt out of the buy-to-let sector.
We have already seen unprecedented demand for properties in recent months, with rents at a record high and the shortest ever time-to-let periods recorded. This was borne out by the final Citylets rental report of 2021 that revealed low property stock levels across the whole of Scotland.
A recent study by the University of Glasgow concluded that such a shortage would put huge pressure on social housing and homelessness services, and the Scottish Association of Landlords (SAL) has warned that over a third of private landlords are looking to reduce their property portfolios with a potential decrease predicted of around 36,000 homes to rent across Scotland.
But Clan Gordon managing director Andrew Gordon says there is huge opportunity for existing landlords to increase their portfolios and for new investors to enter a buoyant market with huge demand for properties and rents at an all-time high.
“Over the years we’ve seen lots of reasons for landlords leaving the rental market. Increased regulation is certainly one, but often it’s a change of circumstance or the need to release capital for a personal investment. Edinburgh’s buy-to-let market is in great shape and property provides a sound option for those looking to invest,” he said.
Scotland’s landlords have been faced with a tranche of new regulations in recent years including the introduction of the private residential tenancy which replaced assured and short assured tenancy agreements, short-term let licensing schemes and control areas, and new draft minimum requirements for a property’s energy efficiency that are currently under government discussion.
Proposed New Energy Performance Certificate
The proposed new energy performance certificate requirements state that:
- By 31 March 2022, all properties will need to have at least EPC band E
- From 1 April 2022, any new tenancy will require the property to have an EPC of at least band D
- By 31 March 2025, all properties will need to have at least EPC band D
If approved, the changes will require many landlords to carry out significant improvements to their properties such as installing new boilers, fitting new windows and doors, and providing loft and wall insulation. We have been supporting our landlords with advice on the priority areas they need to focus on and the government has made interest-free loans and grants available to support landlords who qualify.
A change that could positively impact the lettings market is the designation of Edinburgh as Scotland’s first short-term let control area, which means planning permission for change of use will be required to rent out a property for business and holiday lets. The scheme is designed to limit the number of properties being used for short-term lets, thereby increasing the number available for long-term lets. It also means that lets in buildings deemed unsuitable, such as tenement blocks where noise and unsociable behaviour are issues, can be controlled by the council for the first time.
As Edinburgh’s leading letting agent, our team of professional property managers are responsible for looking after more than 500 homes across the city. Our advisors are best placed to offer expert guidance to landlords who are confused about the new regulations or want help to plan necessary upgrades or purchase new properties.
To talk to one of our expert property managers about hassle-free letting in Edinburgh, schedule a call with Clan Gordon now.