Page 23 - PMR_Sept25

Scottish Rental Market

Scotland’s private rental sector edged closer to balance in Q2 2025 after a period when
supply outstripped demand in many regions. Rents in the main cities remained broadly
stable, while annual growth slowed to 3.6% - well down from 11.7% a year earlier and now
fully aligned with inflation.

This slowdown coincides with the Housing (Scotland) Bill’s progress toward rent controls.
Current proposals, shaped by industry lobbying, would allow rents in designated Rent
Controlled Areas (RCAs) to rise annually by inflation (CPI) plus 1%, capped at 6%. Over a
decade, this could still mean cumulative increases of nearly 48% if CPI holds at 3% - similar
to Edinburgh’s long-term rental growth before the pandemic.

For now, rents in Scotland remain market-driven, both for new and existing tenancies. Councils
are unlikely to present evidence for RCAs for at least two years, and today’s slower growth
may make it harder to justify their introduction. Still, some fear that the sharp, temporary
rent surges seen during the emergency legislation period could skew policy decisions in the
longer term.

Average rents in Edinburgh Time to let in Edinburgh

In Edinburgh, rents showed only a modest Rental homes in Edinburgh took longer to
increase compared with the same quarter last secure tenants in Q2, averaging 27 days on the
year. The city’s average rent rose 0.4% year-on- market compared with 22 days a year earlier.
year to £1,580, a sharp contrast with the double- This slowdown offers some relief for prospective
digit surge recorded between Q2 2023 and Q2 renters after a period of intense competition.
2024. This points to a calmer market with less
competition for rental homes. One-bedroom properties were let the fastest,
typically within 23 days. Nearly one in five found
Larger family properties continued to see the a tenant within a week, and almost three-quarters
strongest demand. Four-bedroom homes were let within a month. Across all property types,
recorded the biggest rise, with rents climbing the market moved more quickly than in Q1 2025,
2.5% to an average of £2,933. By contrast, rents with 17% of homes let in under a week and 67%
for two-bedroom properties edged down by 0.9%, within a month. Four-bedroom properties once
averaging £1,430, suggesting softer demand in this again proved particularly sought after, with 23%
part of the market. let within a week and 72% within a month.

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