Despite the continuing restrictions in place across the country due to the C-19 pandemic, we’ve experienced some normality returning to the rental market in Edinburgh.
With the phasing of restrictions being lifted by the Scottish government, most significantly home moves being allowed again, the amount of activity in the rental market has increased significantly from June into July. The universities in Edinburgh have made recent announcements stating clearly that they will be opening campus-based education after the summer and are encouraging students to return. Naturally this has kickstarted the rental of student properties.
New Lets Agreed are Up. Available Properties are Down.
According to Rightmove, the number of properties available for rent in Edinburgh dropped by 12.5% from the 14th of June to the 14th of July (when 2,167 properties were on the market). This is because the number of new tenancies agreed during the first fortnight of July increased by a whopping 42% compared to the first fortnight of June. The number of properties on the rental market is still double what it was last year. Only time will tell how much of this excess stock is due to pent up demand after the quiet lockdown period, but the indications are that the Edinburgh rental market is in better shape than we expected.
Current Tenancies have stabilised
The rate at which new properties are coming on to the market in July has dropped by 13% since June (from 396 down to 345). This indicates that the rate of existing tenancies coming to an end has slowed (since the majority of properties added to the market are re-advertising of properties that were previously rented out, rather than new rental properties that will be advertised for let for the first time). This is consistent with what we see in our own tenant-base. While many tenants’ income will continue to be badly affected by the Coronavirus lockdown, and more job losses will come, we do not expect to see a repeat of the financial shock faced by tenants that occurred when lockdown started in March.
What does this mean for the Edinburgh rental market?
The rental market is recovering slightly faster, and is in better shape, than we expected. The number of properties on the market has not reached as high a level as other parts of the UK where large void periods and drops in rent levels are being reported. From analysing the Umega and Rightmove data, we can see that demand from new tenants looking for homes is greater than the supply of new homes on to the rental market. If this continues then rent-levels will be stable over the coming weeks and months.
We’re keeping a close eye on it.