RENTAL INFLATION COOLS SHOWING A RETURN TO SEASONAL TRENDS
The Edinburgh rental market has entered a period of significant change, with stock levels rising sharply over the winter months. After three years of an extreme supply-demand imbalance, we’re now seeing a shift in the market dynamics, which is beginning to cool rental inflation.
STOCK LEVELS ARE RISING
For the last three years, the number of rental properties available on the market in Edinburgh on Rightmove has not surpassed 1,000 at any given time. That changed on November 8, 2024, when the available stock exceeded this threshold.
- In September 2024, the number of available properties in Edinburgh on Rightmove sat at 780, in line with where it had been since early 2022.
- By October 2024, it had climbed to 910.
- It then jumped to 1,120 in November, 1,127 in December, and 1,191 by the end of January 2025.
That’s an increase of 39% year-on-year—a significant shift in market conditions.
WHY IS THIS HAPPENING?
The rise in available rental properties is being driven by two key factors:
- More properties being added to the market – The number of rental properties listed is up 21% year-on-year.
- A slowdown in tenant demand – While the number of listings have increased, the total stock of available properties has grown at a much faster rate. In January alone, property listings added were 21% higher than in January 2024, but the overall number of available properties was up almost 40%, suggesting that properties are taking longer to let.
This shift indicates that, for the first time in years, tenants have more choice, which is cooling the pace of the market.
THE IMPACTS OF RENTS
With more properties available and tenant demand softening, rental inflation is slowing down. According to Zoopla’s most recent data (as of October 2024), Edinburgh’s annual rental inflation has dropped to 4.8%.
This is a significant decline compared to the 14.5% rental inflation seen just 12 months prior. The result? The intense pressure on rents is easing, giving tenants some relief after years of rapid price increases.
A RETURN TO SEASONAL TREND
The recent slowdown appears to signal a return to the traditional seasonal rental market patterns we saw before the pandemic:
- Winter months – Lower tenant demand, more available properties, and slower rent growth.
- Spring, summer, and autumn – Increased competition for rentals, faster-moving stock, and upward pressure on rents.
If this trend continues, we could see a healthier market balance in the long run, avoiding the extreme shortages and skyrocketing rents of recent years.
WHAT’S NEXT?
Looking ahead, we anticipate that demand will ramp up again as we move into the busier spring and summer months. However, the current cooling-off period suggests a much-needed rebalancing of Edinburgh’s rental market, making conditions more stable for both landlords and tenants.
We’ll continue to monitor the trends and provide updates as the market evolves.