What was the private rental market in Scotland like in Q3 2024?
The latest Citylets report is now available, detailing the performance of Scotland's private rental sector during the third quarter of 2024.
In Q3 2024, political changes in the UK have had significant effects on the rental market, particularly impacting landlords and property investors. Labour's recent win in Westminster has led to a new Renters' Rights Bill, replacing the earlier Renters (Reform) Bill introduced by the Conservative government. This new legislation, along with expected changes to Capital Gains Tax (CGT) in the autumn budget, has raised concerns about rental supply across the UK, especially in Scotland's private rented sector (PRS), where housing shortages have long been an issue.
The Scottish government, under new leadership, seems to recognise the challenge of full market rent controls, as this policy could discourage large-scale property investors, who are crucial for building more rental homes. Some investors view Scotland as a less favourable region due to regulatory pressures, but recent statements from officials suggest that they may amend the Housing (Scotland) Bill to make the market more appealing for investors. While these changes offer hope, industry experts remain cautious, emphasizing the importance of balancing market expansion and stability.
Currently, Scotland’s rental market operates as a free market between tenancies, though policymakers are reminded that rental prices can decrease as well as increase. The annual growth rate of rent has slowed down, with most cities experiencing low single-digit growth, and in Glasgow, rents have slightly decreased. This trend suggests a potential shift in the rental market, which may continue if the Bank of England (BOE) lowers interest rates, affecting mortgage rates and easing rental pressures. The pandemic-driven spike in rent prices appears to be over, and some believe it would be wise to take a long-term approach to policymaking, rather than rushing into regulations that could affect a market still in recovery.
In terms of specific locations, average rents in Glasgow dropped by 0.5% year-over-year in Q3 2024. Many regions report an increase in "Time to Lets" (the time taken to find tenants), often a sign of falling rents.
Overall, the rental market seems to be stabilising, which is positive for tenants. However, despite modest rent growth and the possible beginning of mortgage rate reductions, there is mixed sentiment among landlords. The latest data from the Scottish Household Survey and the Landlord Register indicate a shrinking PRS, down from a peak of 15% in 2017 to 13% in 2022.
The rental market in Edinburgh
Average rents in Edinburgh
The average rent in Edinburgh continued on a steady single-digit growth trend, after double-digit rates increased seen in previous years. The average cost of renting a property in the capital was £1,598 per calendar month, which is an increase of 3.4% compared to the same period of 2023.
Whilst the biggest increase in rental yields seen across Scotland were on one-bedroom and four-bedroom properties (both 9.3%), the capital bucked this trend as it saw the biggest increase in three-bedroom properties. Three-bedroom properties increased by 6.2% year on year, to a rental rate of £2,070. Demand for rental properties across all areas and price levels remains notably higher than the available supply. This creates significant challenges for tenants, especially those seeking more affordable, long-term rental options.
With an increase of 4.2% to a rental rate of £1,106, one-bedroom properties were the second highest increase in Edinburgh, hinting at strong demand from young professionals hoping to rent in the capital.
Time to let in Edinburgh
On a positive note for tenants, properties in the capital let in 20 days on average, 6 days slower than the previous year.
As seen in Q2, one-bedroom properties in Edinburgh performed well again, taking only 14 days on average to let. 39% of one-bedroom properties were let within a week, and 89% were filled within one month.
The time taken to let 3-bedroom properties improved slightly during the period compared to Q2, with 3-bedroom properties taking 26 days to let in Q3 compared to Q2 which took 29 days. However, 4-bedroom properties took 30 days to let in Q3 compared to 21 days on average in the previous quarter.
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The rental market in Glasgow
Average rents in Glasgow
According to Citylets data, the average rent for properties in Glasgow has seen a slight decline over the last quarter, dropping by 0.5% year-on-year to an average of £1,202 per month.
One-bedroom properties appear to be in the highest demand, likely driven by the city’s large population of young professionals. Average rents for these units have risen by 5% over the past year, reaching £923 per month. Over the longer term, four-bedroom properties in Glasgow have shown substantial growth, with rents increasing by 91.8% over the past decade - an indication of the significant development in Glasgow’s rental market in recent years.
Time to let in Glasgow
According to Citylets data, the average time for a property to be let in Glasgow was 21 days, which is 5 days longer than the same period in 2023. In total, 31% of rental properties in the city were let within a week, while 76% were let within a month.
In Q2 of 2024, one-bedroom properties in Glasgow continued to rent out the fastest, with an average time of 17 days, while four-bedroom properties took the longest, averaging 35 days. Additionally, 36% of one-bedroom properties were let within a week, and 80% were let within a month.
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The rental market in West Lothian
Average rents in West Lothian
The data reveals that the average rental rate for properties in West Lothian reached £1,017 in Q3 2024, reflecting an annual increase of 10.3%. Four-bedroom properties experienced the largest rise in rent in the area, climbing 13.5% to an average of £1,214.
Time to let in West Lothian
Properties in West Lothian let in an average time of 18 days, which was 3 days slower than the same period in 2023. 22% of all available West Lothian rental properties were let within a week, and 80% were let within a month. West Lothian's one-bedroom properties showed the strongest results in terms of time to let, with 27% let within a week of being advertised, and 87% let within a month.
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Find out more
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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.