Four weeks ago the UK entered a state of lockdown and every day since then we have been tracking the state of the private rented market in Edinburgh. We’ve used wider market data from Rightmove alongside our own internal metrics to understand what’s going on and where things seem to be headed in Edinburgh.
Comparing April 2020 to April 2019: tenancy endings affecting the market
The total volume of property on the available rental market in Edinburgh is up 57% on the same time last year (2,236 properties now compared to 1,427 a year ago). Looking more closely at the data we can see that this is entirely due to tenancies coming to an end.
According to Rightmove, rental properties that are being advertised on the market for re-let after a previous tenancy came to an end have increased over the last 4 weeks to more than double the number from this time last year (1,689 now, compared to 815 at this point last year). By contrast, the volume of properties newly advertised for the first time are slightly down compared to last year (547 new properties so far in April this year compared to 612 for the same period last year).
More rental properties are coming available
The data available in the public realm doesn’t yet tell the full story. At Umega we have a high number of tenanted properties where the tenancy is coming to an end and will soon be advertised on the market (upcoming re-lets). The number of properties in our re-let pipeline is 3 times the number of re-let properties that are already advertised on the market – much higher than normal. This tells us that the number of properties on the market in Edinburgh will continue to rise, most probably until lockdown is over. Assuming other agents are experiencing similar trends, our estimate is that by June the number of properties on the market will be 4 times higher than the same period last year.
Properties are still letting, but slowly
According to Rightmove, there have been 66 lets agreed in Edinburgh in April so far compared to 162 during the same period last year, despite there being many more properties on the market. 15 of those 66 have been agreed through Umega, although we have experienced a much lower level of new tenant enquiries over the last 3 weeks – 15 each day compared to over 40 per day before. We expect the volume of tenant enquiries to remain low while Edinburgh is under lockdown. This will be followed by a very large number of new tenant enquiries immediately after restrictions are lifted.
Rent-levels in April are down slightly
For the re-lets we agreed in April, the rent-level on new lets is on average 94% of the rent level at the end of the previous tenancy. While we don’t have a great deal of data, what we do have suggests rent levels are slightly reduced. This is consistent with a market that currently has more properties available than prospective tenants. We’ll have to wait and see what happens to rent levels when the C-19 restrictions are eased and more tenants come back to the market.
We’ll continue to monitor rents levels on agreed lets to see what impact, if any, the growing number of properties has on rent levels.
If you would like any more information on what we’re noticing in the Edinburgh rental market during COVID-19, please get in touch.