Lettings in the time of Covid
The Scottish rental market has experienced a period of strong growth with demand for rental properties, especially in core urban markets, supporting annual growth in average rents of between 3% and 5% over the past 10 years. In Edinburgh, the average advertised rent in the city is now £1,139pcm with the average rent in Glasgow now above £840pcm. This growth has seen advertised rents increase in Glasgow by over 40% in the past decade and in Edinburgh by over 50%. Both these cities have outperformed national Scottish growth, which has increased around a third in the past ten years. In contrast, Aberdeen has seen rents fall by -28% in the past 5 years since the shift in the oil market. The strong growth in rental demand and, in turn, average rents, started in around 2013 and persisted into 2019. More recently, rental growth has slowed, averaging 2.8% per year in Edinburgh over the past 3 years and 4.0% in Glasgow. Dundee over this period has returned a 4.6% compound annual growth rate.
Over 2019 and into 2020, rents have flattened with the pandemic seeing a stalling in market activity. During the lockdown, stock levels in Edinburgh fell by around -42% year-on-year before recovering in the weeks after the restrictions were lifted. A spike of supply later in the year has seen the cumulative supply up 11% on the same period last year. In Glasgow, stock levels were down around -46% during the pandemic and have been slower to recover, still remaining -14% below last year’s levels. This reduced stock supply in Glasgow has seen upward pressure on rents in the weeks following lockdown, while in Edinburgh average rents remain broadly in the line with rents at this time last year.
The short-term rental market has been most acutely impacted, with listings on the likes of Airbnb falling to around 5,500 in Edinburgh during Spring. In August in Edinburgh, when there would typically be over 14,000 listings for the Festival, the figures were less than half this level, showing the scale of the retreat in this market. While some landlords have waited and kept listings active, many have decided to pre-empt the regulation of the sector and place their properties in management for long-term lets or on the sales market.
Looking ahead, rental demand remains strong as flexibility and lifestyle factors in urban markets continue to drive demand.
If you are looking to let your property in Edinburgh , Glasgow or out of town , please don't hesitate to contact our lettings team.
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