What was the Scottish rental market like in Q1 2023?
Scotland’s private rental sector was relatively calm in the first quarter of 2023 with mortgage rates decreasing from the higher rates seen in Q4 2022. However, rates are still up substantially compared to previous years and landlords are still being affected by rent freezes. The latest data reveals that there is still demand from renters in Q1 2023, however, there are continued concerns around supply.
Citylets, a leading portal for property to rent, says the Scottish Government’s Cost of Living (Tenant Protection) (Scotland) Bill 2022 has raised concerns in the property industry and that it will “increasingly exacerbate the root causes of the problem”.
In this quarter, the average monthly rental cost in Scotland exceeded £1,000 for the first time following a continued pattern of growth year-on-year.
One-bedroom flats, with an average rent of £710, were the quickest to let across Scotland, letting on 16 days on average (two days faster year-on-year). 41% of these properties let within one week.
Demand was also high for two-bedroom flats which experienced the biggest year-on-year rental increase, with average rents for this property type rising 13.8% to £964.
If we compare Scotland’s largest cities, there was intense competition for property to rent in Glasgow and Edinburgh with average time to lets (TTLs) of 17 and 18 days respectively.
Edinburgh's average rental rate rose 13% to £1,372 per month. Glasgow’s rental rate averaged at £1,105, up 13.7% year-on-year.
The Edinburgh rental market
Average rent in Edinburgh
According to the Citylets report, Edinburgh’s rental rates grew by 13% during the first quarter of 2023, taking the average rent to £1,372 per month. The continued shortage of all types of properties in the Capital is making finding a home difficult for renters meaning they are remaining in properties for longer.
Two-bedroom properties saw the most substantial growth with a 16.2% increase year-on-year, driving the average rental rate for this property type to £1,303. This means that Edinburgh’s two-bedroom properties have seen a 78.5% increase in rental rates over the past decade, a strong result for long-term property investors.
In fact, all property types (from one- to four-beds) saw growth of over 55% across the past decade, demonstrating how strong an investment the Edinburgh rental market can be for those willing to pursue a longer-term venture.
Time to let in Edinburgh
The average time to let for Edinburgh property was 18 days in the first quarter of 2023.
One-bedroom properties in Edinburgh let the fastest, in 13 days on average (no change from the previous year). A total of 49% of one-beds let within a week of being advertised, and 89% were let within one month.
Best rental yields in Edinburgh
Combining Citylets and ESPC data, we can reveal that two-bedroom flats in EH12 produced the best rental yield in the Edinburgh marketplace, at 6.8%. Three-bedroom properties in EH8 also performed well, with a rental yield of 6.5%.
Nicky Lloyd, Head of ESPC Lettings, said: “The first quarter of 2023 has been slightly calmer than the last quarter of 2022 which was a challenging period for the private rental market with the cost of living crisis, rent freezes and interest rates all playing a role.
“However, while demand for rental properties in Edinburgh is strong, it is outstripping supply meaning tenants are finding it harder to find a rental home and are staying in current tenancies for longer.
“Two-bedroom properties in EH12, which covers Corstorphine and Murrayfield generated strong rental yields during this time. Three-bedroom properties in EH8, covering Holyrood, Abbeyhill and Willowbrae, are also a great investment with this postcode being popular with families and professionals – plus it offers great access to the city, the coast and green spaces, with plentiful amenities and excellent transport links.
“If you need advice on buy-to-let properties, get in touch with ESPC Lettings and we will be happy to help.”
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 Citylets data, the average rent for property in Glasgow increased by 13.7% to £1,105.
Three-bedroom properties saw the biggest increase in average rents, taking the new figure to £1,611 per month (14.5% higher annually).
Two-bed properties had the second highest increase in average rents, coming in at 14.4% higher annually at £1,143. One-bed properties also saw solid growth in rental rates over the past year, with the average rent rising 14.3% to £830.
Time to let in Glasgow
In the first quarter of 2023, Glasgow’s average time to let dropped to 17 days – four days faster than the same time period in 2022.
One-bedroom properties let the fastest, in just 11 days (one day faster annually), showing just how competitive the private rental market is in the city. A total of 54% of one-beds let within a week, and 90% were let within a month of coming onto the market.
Search houses and flats for sale in Glasgow.
The West Lothian rental market
Average rent in West Lothian
West Lothian has become increasingly popular in recent months thanks to buyers seeking larger, more affordable homes within easy reach of the Capital.
Rental rates across the region rose 3.4%, taking the new average rent to £830 a month.
Two-bedroom properties were the most popular, with rents rising 8.5% year-on-year to an average of £726.
Time to let in West Lothian
The average time to let in West Lothian reduced by 12 days year-on-year, meaning properties were let within 26 days on average.
West Lothian’s one-bedroom properties let the fastest, with an average time to let of 21 days.
Search houses and flats for sale in West Lothian.
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ESPC Lettings
If you’re interested in entering the buy-to-let market or are a landlord looking for advice, ESPC Lettings can help. As a letting agent based in Edinburgh, we can assist with all stages of renting out a home, from finding the right property to sourcing tenants to property maintenance.
Get in touch with the team today on landlord@espc.com or 0131 253 2847.