|October 30, 2020||No Comments|
2020’s bumpy year started with the onset of Covid, followed by March’s lockdown, which lasted over 3 months. The property market re-opened on 29.06.2020 and the pent-up demand resulted in a very busy summer. September brought the usual slow-down, with October being quieter than in previous years.
The early months of 2020 brought a deluge of HMO vacancies as universities moved to online teaching and students returned home 2-3 months earlier than usual. Luckily, the demand picked up in late June and Edinburgh Letting Centre managed to let all HMO properties advertised, up to the end of August.
Furthermore, this year was different from previous years – viewers were more demanding and much less interested in flats without proper communal space (i.e. living rooms). Some properties with a licence for 4 tenants were instead let to 3 sharers (with an obvious reduction in price), so they could enjoy a proper lounge. Also, properties with small bedrooms lingered on the market longer than usual.
Rents for HMO properties have been quite steady. However, voids for less desirable properties (small bedrooms, no lounge, imperfect location, tired décor or furniture) increased. There is a significant difference in rents achieved per bedroom between properties with communal space and properties without. Edinburgh HMO landlords and investors should estimate whether turning a living room into a bedroom is the right strategy (less rent per bedroom, less interest, longer voids, higher wear and tear). We have decided to share average 2020 rents per bedroom in the most typical (3 and 4 bedroom) HMOs managed by the Edinburgh Letting Centre.
Rents per bedroom in most typical HMOs
October 2020 brought a return of HMO inspections in Edinburgh, initially for new licence applications (i.e. not for renewals). This is very good news for landlords and investors who applied for an HMO licence in early 2020 and have been waiting for HMO, fire service and building standards inspection to obtain the licence.