Covid-19 has impacted Scotland’s rental markets in many ways.

First of all, an increase in stock has put pressure on rents, especially in Edinburgh, where the average asking price per calendar month fell by 2% in the three months to the end of June this year, according to Citylets.

Lockdown has also affected the needs and wants of tenants, with interest increasing not only for more space, but also specific locations and property attributes.

With many people working from home during the lockdown period, a desire for more inside space has increased.

Savills letting agents have reported an increase in demand for properties with a separate space to work from home. Similarly, a strong Wi-Fi or internet connection is now higher on a tenant’s list of requirements. Meanwhile, demand for family homes close to sought-after schools − where supply has traditionally remained constrained − remains strong.

'Try before you buy' tenants

Our agents also reported an increase in the number of ‘try before you buy’ tenants with many renting in a new area before committing to a purchase.

This is underpinned by the fact that in our June buyer and seller survey, around half of respondents said if they were unable to secure a property in the next six months, renting would be a viable option.

This also reflects part of a wider trend where people are choosing to rent as part of a lifestyle decision.

Outlook

Tenant demand has looked robust since the reopening of the market, with some potential buyers favouring the flexibility of the rental market as events around Covid-19 progress.

This demand has helped absorb some of the excess stock. But the experience of lockdown has meant that a property’s attributes, more so than value, have become the driving factor.

Economic uncertainty could have an impact on demand, and in markets underpinned by young professionals, it may put a ceiling on rental growth if wages do not see the same rate of increase. For rental markets in suburban locations, the current strength of demand for family housing should underpin steady rental growth over the next few years.

For more information, please contact a Savills office in your area or arrange a market appraisal with one of our local experts.

_{Read the articles within Scotland Residential – Autumn 2020 below}