Decrease in Properties Added to Market
A quick look at the market data from Rightmove for properties to rent in Edinburgh shows that the number of properties added to the rental market for the first two months of this year is less than last year; 1,174 this year compared to 1,339 in 2022, a drop of 12%.
This is worrying news for the rental sector for a couple of reasons. Firstly, it indicates that the supply of properties to rent in Edinburgh is continuing to slow. There was also an expectation (or was it hope?) that rising interest rates and the cooling of the property sales market would lead to more properties for Edinburgh’s rental market. So far this is not the case and the data tells us there are fewer properties than ever coming on to the Edinburgh rental market.
Low Levels of Available Properties
The number of available properties to rent in Edinburgh on Rightmove was 484 at the end of February. This is an historically low number and indicates that when the busy summer rental months arrive, there will be a bigger gap between supply of rental properties, and demand from tenants looking for new homes, than ever before.
Properties Renting Extremely Quickly
Rental properties continue to rent extremely quickly. This is exacerbating the lack of choice of properties on the market since properties are advertised for much shorter periods than previous years. There is also upward pressure on rents which is understandably not welcome news for tenants, Scottish Government or tenant campaign groups.
Change in Strategy Needed for Policy Makers
The Scottish Government was planning to push ahead with longer-term policy changes designed to cap rents and prevent evictions. They now appear to be pausing on this road as the stark reality of dwindling supply of rental homes versus unprecedented demand is showing that there’s no point in improving the deal for tenants at the expense of landlords if tenants are left with nowhere to live. A broader approach is needed. If rent caps are here to stay, then policy makers will have to provide landlords with some other benefit (such as a tax cut) to prevent rental stock availability falling even further.
These still feel like sticking plasters compared to the real problem that’s been 20 years in the making; undersupply of new build homes, in the social sector especially. It’s hard to see any significant change in available housing numbers any time soon but for the rest of this year, it looks like it will be another very fast-moving year on the rental market.