Nicky Lloyd

With details being revealed that rent controls will end from April 2025, allowing rent setting to return to open market trends, now could be a perfect time to enter the Edinburgh market.

The undeniable fact is that the Edinburgh rental and overall property market is resilient. The demand for quality rental properties far outstrips demand, with the volume of tenants that we are seeing attend viewings exceeding the property availability. We are in the middle of a housing emergency in Scotland, with a substantial overall shortage of available property throughout the country. This demand needs to be met. We have a transient population in Edinburgh with people at all stages of their life looking to the private rental sector to meet their housing needs.

Property investment should never be taken lightly, and as with all ventures there are costs involved. With the consistent history of property appreciation in Edinburgh, there can be long term financial gains that can benefit savvy investors currently.

In the last ten years, the average selling price of a one bed property in Edinburgh has risen 52%, whilst the average rent has increased 74%. Looking over this timespan, the proposition becomes increasingly attractive.

Property selection is key

A two-bed flat in Leith offers a good option, with a 25 year buy-to-let mortgage with a 20% deposit the monthly rent should cover the mortgage payment and allow for returns on other costs. Rental yields are currently sitting at 6.2%. The average rent for a two-bed property in Edinburgh was £1,444 in Q4 2024 according to Citylets data.

Another key consideration will be the fabric of the property. The upcoming Heat in Buildings Bill, which is currently being proposed, and prospective changes to EPCs will mean that properties with energy saving features will be in high demand, and can save landlords money in the long term. Properties with superior energy efficiency may be able to command higher rental income over time and there are some grants available for eligible landlords to help towards these costs.

There is no denying that there are now substantial costs for entering the buy-to-let market and providing this much needed housing to the market, however the ongoing rental return and the increase in property value over the long term means it can still be an attractive option.

Nicky Lloyd is head of ESPC Lettings