Podcast: Insights on the Edinburgh rental market
In this episode of the ESPC podcast, Paul & Megan are joined by returning guest Nicky Lloyd, Head of Lettings at ESPC Lettings. They cover some new ground in this discussion including advice for new landlords, why more and more homeowners are opting to rent their properties instead of sell and how much rent should be priced at.
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Key Insights
Rent control changes
The Scottish Government’s emergency rent cap has ended, meaning landlords can now increase rents freely during a tenancy. However, future rent controls in designated "rent pressure zones" could be introduced, though none exist yet in Edinburgh. This shift has sparked mixed reactions from tenants and landlords.
Current rental market trends
Demand remains high, especially for affordable properties, while more expensive rentals (£1,200+) are seeing increased negotiation from tenants. Some landlords are raising rents aggressively, while others prioritize tenant retention by keeping increases moderate.
Rent vs. mortgage costs
Rising rental prices mean that, in many cases, owning a property with a mortgage is now cheaper than renting. This is pushing some long-term renters to explore buying, despite the challenges of saving for a deposit.
Pricing strategy for landlords
Setting a realistic rent is crucial. Properties priced too high may sit vacant for weeks or months, leading to lost income. Many landlords are finding that slightly lower rents attract tenants faster, ensuring steady cash flow with minimal void periods.
The rise of ‘accidental’ or ‘strategic’ landlords
Some homeowners are renting out properties instead of selling due to market conditions. For example, people moving in with partners or relocating abroad may choose to let their property as a financial opportunity rather than sell in an uncertain market.
Legal responsibilities of landlords
Landlords must comply with various legal requirements, including property registration, gas and electrical safety checks, proper tenancy agreements, and maintenance obligations. Failure to meet these standards can lead to fines or legal action, which makes using a full-service property management firm like ESPC Lettings attractive for landlords.
Challenges for new landlords
With high competition from first-time buyers, property investors must carefully assess potential rental yields, maintenance costs, and tax implications before purchasing. Working with letting agents can help navigate regulations and market conditions.
Tenant affordability checks
Letting agents use professional referencing agencies to assess tenants' financial stability. This includes checking income, employment status, and credit history to ensure they can afford the rent without financial strain, reducing the risk of arrears.