Demand is outstripping supply in the rental sector - Karen Turner

We recently saw the judgment delivered on the judicial review for the licensing scheme introduced by City of Edinburgh Council for short lets. Edinburgh was designated as a control area, which essentially meant that any short-let property would require planning permission or a certificate of lawfulness to confirm that the property has been used for short-term letting for more than ten years.

Applications for licensing required the landlord to meet regulatory conditions, as well some other administrative conditions. The judgment ruled this as unlawful. The full extent of what this means is yet to be confirmed, but it will mostly require a review of the current regulations.

This came at a time when the housing available in Scotland is in decline. Declining stock and the regulations around short lets is putting severe pressure on Edinburgh, to the extent that its ability to host the world-famous Edinburgh Festival is being questioned.

Many potential short-let landlords have been turned away this year, as they would not be granted licences under the current parameters of the legislation.

Karen Turner, Director of Lettings, Rettie & Co.

The unforeseen rent freeze last year, coupled with the subsequent extension of the rent cap at three per cent until March 2024, has severely impacted stock levels. An increase in Additional Dwelling Supplement (ADS) to six per cent last year further impacted the investment into Scotland from larger funds and new landlords.

Advertised rents in Scotland and the main urban centres are showing historic highs running into double-digit figures. At the same time, we are also seeing time to let levels falling. Investors have pulled out of the market, or put the brakes on investing in Scotland as there is so much uncertainty resulting from the Government squeezing the supply of homes at a time when demand is rising. This will be reflected in our rental market overview, due to be published shortly by our research team headed up by Dr John Boyle.

The cost of living crisis is impacting both landlords and tenants and we hear this frequently through the conversations our teams are having.

Rettie & Co is well placed to support both landlord and tenant clients with our one point of contact, portfolio manager-led service. And, we recognise that having access to good quality and affordable homes is important across all price points.

Key safes for short-term lets at an Edinburgh tenement

We were pleased to announce Rob Trotter joining the team last week, with Rob moving from DJ Alexander to help expand our portfolio of managed properties. We don’t necessarily want to be the biggest agent, but we do want to continue to deliver excellent customer service, which sits at the heart of everything we do. Overall, we see considerable scope to increase lettings activity over the next few years

The supply versus demand issue is real, and the road ahead is bumpy if the stock numbers continue to dwindle. The landscape ahead isn’t as clear as it could be, but it can be a positive one if we can get all parties around the table to discuss and collaborate on ways to deliver more homes, encouraging investment into Scotland from the aspirational single landlords to the major institutional investors. Collectively, we want to work together to encourage greater investment, and we know this will be to the benefit of all.

​Karen Turner, Director of Lettings, Rettie & Co