Increasing demand and limited supply pushes rents and competition to new levels across Scotland
Increasing demand and extremely limited supply pushes rents and competition to new levels across Scotland
The latest report from Citylets presents a frenzied picture of the Scottish rental market for the final quarter of 2021, with stock levels at record lows, time to let dramatically declining, and competition and prices rising in response, making for a difficult market for renters.
Stock levels were at just 32% of the levels recorded in Q4 of 2018 for comparison; the late student season and the worsening Covid-19 situation, combined with an increased number of tenants staying in their current rentals due to the anxiety of the situation, meant that supply was hindered, allowing demand to grow even larger.
Unsurprisingly, Scotland’s rental sector saw positive annual growth across all property types, with a 5.2% annual rise taking the national average rent to £869pcm.
Demand was high for properties of all sizes across the country. 46% of one-bed properties were let within a week, and their average time to let was the lowest at just 16 days. However, there was also huge demand for larger homes and properties in the suburbs, with three-bedroom properties reporting the highest year-on-year rental growth of 7.3%, and all property types letting in under 20 days.
If we compare Scotland’s major cities, both Edinburgh and Glasgow saw significant growth in Q4 2021. Edinburgh posted a 9.8% annual growth, meaning that rental rates achieved a new all-time high of £1191 on average. Not to be outdone, Glasgow reported a substantial 15% year-on-year growth in average rental rates, with a new average of £974pcm. In addition to this, three- and four-bedroom homes in the Glasgow area saw a 30% annual growth, as demand for larger homes expanded.
The average time to let across Scotland saw a steep decline of 11 days, with properties now taking only 17 days to let on average.
The Edinburgh rental market
Average rent in Edinburgh
According to the Citylets report, rental rates in Edinburgh grew by 9.8% year-on-year, to create a new average all-time high of £1191 per month.
Four-bedroom properties saw the biggest annual growth, with a 17.8% increase taking the new average let for this property type to £2142.
All property types saw moderate growth across the quarter compared to the previous year, and substantial growth across the past ten years, for longer-term investors.
Time to let in Edinburgh
The time to let in Edinburgh dropped to 11 days on average – this figure is 22 days lower than we saw during Q4 of 2020.
One-bedroom properties let the fastest, in just 10 days on average. 59% of one-beds let within a week of being advertised.
Best rental yields in Edinburgh
Combining Citylets and ESPC data, we can reveal that two-bedroom properties in EH4 produced the best rental yield at 7.1% on average, closely followed by three-bedroom properties in EH11, with an average yield of 6.7%.
Nicky Lloyd, Head of ESPC Lettings, said: “This has been a high-pressure quarter for the Edinburgh rental sector, with low supply and high demand combined across the marketplace, for properties of all kinds. As we saw earlier in 2021, the last three months of the year saw properties snapped up within minutes of them being made available, particularly in areas popular with families and young professionals.
“Unsurprisingly, two-bedroom properties in the typically sought-after areas of Comely Bank, Dean and Craigleith have been especially popular, while the surge in demand for three-bedroom properties around Dalry and Gorgie is typical of the resurgence in the student let market over the past few months.
“Average rents are at an all-time high in Edinburgh, and demand from new tenants continues to be especially strong. Quality properties of all types and sizes are in high demand, with particular emphasis on four-bedroom family homes and one-bedroom flats, which have seen the biggest annual growth and the fastest time to let respectively.”
Get in touch with Nicky to discuss the Edinburgh rental market.
Search houses and flats for sale in Edinburgh.
The Glasgow rental market
Average rent in Glasgow
According to the Citylets data, the average rent for Glasgow property rose substantially over the fourth quarter of 2021, with a 15% annual increase taking the new average to £974.
As was the case in Edinburgh, four-bedroom properties saw the biggest rental rate growth in Glasgow, with a 35.3% year-on-year increase. Looking at the figures for this type of property, we can also see that rental rates for four-bedroom homes have increased 63.1% in five years, and 80.7% over the last decade.
All property types saw significant annual growth (of 10% or more) across the fourth quarter of 2021.
Time to let in Glasgow
Tenants needed to be quicker than ever in Glasgow during the last quarter of 2021, as the average time to let dropped to just nine days, an annual reduction of 11 days.
One-bedroom properties were let the fastest, with an average time to let of only seven days – in fact, 68% of one-bedroom homes listed were let within this timeframe. This is also 11 days faster than the same time last year, showing how strong the demand has grown for this property type.
Four-bedroom properties also saw a steep decline in their average time to let, with a reduction of 28 days taking the new average to 15 days.
Search houses and flats for sale in Glasgow.
The West Lothian rental market
Average rent in West Lothian
West Lothian saw more modest growth over Q4 2021 in comparison to the major cities, with a seemingly more manageable level of competition and demand from tenants. The average rental rate was up 2.6% year-on-year, to £769. Within this, two-bedroom flats saw the biggest growth of 5.1% annually, with an average rent of £678pcm.
Time to let in West Lothian
The average time to let for properties in West Lothian dropped by three days during the last three months of 2021, taking the new average to 13 days.
Repeating the pattern seen across the country, one-bedroom properties let the quickest, in just 11 days on average – although this figure is one day higher than seen in West Lothian during Q4 2020. 47% of one-bedroom properties in West Lothian were let within a week of being made available.
Search houses and flats for sale in West Lothian.
Find out more
Read the full Citylets report.
If you’re interested in finding out more about the Edinburgh buy-to-let market or if you’re a landlord looking for assistance with managing and marketing your properties, get in touch with ESPC Lettings on landlord@espc.com or 0131 253 2487.
