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Edinburgh Property Rental Market Shaken Up By Covid-19

Citylets have just issued its 2020 Quarter 1 report. What a read it is! The data gathered confirms huge and instant changes – affecting both supply and demand for rental properties and flats in Edinburgh. With lockdown introduced on 23.03.2020 and certain sectors of the economy put on hold the week before, it is reasonable to suspect that the next report (Q2 2020), will show what really happened to the market when the entire UK ground to a standstill.

Edinburgh: Avalanche of Ex-short Term Lets

According to the Citylets 2020 Q1 report, in March 2020 supply of Edinburgh’s available rental property rose by staggering 66%. It is a shocking rise – which is easily explained by the evaporation of the short term / holiday / Airbnb rental market. All Edinburgh landlords who had bet solely on tourists had the proverbial ‘rug pulled from under their feet’ on 23.03.2020. The first two months of 2020, and even the first week of March were quite busy – with average rent rising to £1142 pcm.  This masks the market dip in late March when lockdown was enforced.

Edinburgh Average Rents in Long Term Sector

Source: Citylets 2020 Q1 report

Edinburgh Letting Centre expects to see significantly longer time to let in the 2nd quarter of 2020 – and slightly lower average rents than a year ago.

The impact of Covid-19 on HMOs

Houses of Multiple Occupancy are usually let to students – and Edinburgh is a university city. Edinburgh Letting Centre is an HMO specialist Edinburgh letting agent and these are our observations, so far:

• Significant numbers of students informed us in April about their intent to leave in May.
• The proportion of students leaving HMO properties was only slightly higher than in 2019 (Private Residential Tenancy allows tenants to leave their property giving 28 days at any time).
• What dramatically changed is that immediate demand for empty HMO properties has dropped.

HMOs of good standard and in good location still generate interest, but, unlike a year ago, students do not want to move in immediately or in June; they seek new leases starting in August 2020. Although face-to-face viewings have been temporarily banned, Edinburgh Letting Centre continues to operate during lockdown, as we conduct online viewings (360 degrees / 3D photos). Agents who did not invest in appropriate technology before lockdown are unable to conduct any viewings at all, so our experience may well be different.

Our Advice to Edinburgh HMO Landlords

While the market is slower now, students in their bulk seem set to return to Edinburgh – but not before August 2020. Our advice is to use this available time (once refurbishments and redecoration are allowed again) to upgrade your HMO property. Now is a good opportunity to re-assess: redecorate tired rooms, look at carpets, and consider new furniture. In short – please do everything to make your property more presentable for the new HMO season.

Legal Aspects of Covid-19 in Scottish Lettings

Coronavirus Scotland Act 2020 came into force on 07.04.2020. It extends the notice periods to tenants for notices to quit sent between 07.04.2020 and 30.09.2020, when the act expires (although it could be renewed twice).

Changes apply both to Private Residential Tenancies and Short Assured Tenancies. The usual period of 28 or 84 days for PRTs and 2 months for SATs has been extended to 6 months. There are some exceptions: in certain cases, the notice stays the same (abandoned property) or has been extended to 2 or 3 months. Exceptions relate to anti-social behaviour of the tenants or their associates, criminal convictions of the tenant or their associates, or when the landlord or a member of their family would like to live in their property.