Now is the Time to Invest in Edinburgh as Rents Set to Rise

Edinburgh has been going through great change over the last decade with the installation of a new tram system. With that now complete, the focus has turned to the commercial side of the city, impacting on the residential market.

There are plans for new commercial buildings and the St James Centre off Prince’s Street is now undergoing a £850 million refurbishment, promising an influx of new jobs.

With all of this growth comes more people looking for somewhere to live. Experts are predicting rental prices to rise over the next five years, meaning that Edinburgh is one of the best places to invest in right now.

Building works taking place in Edinburgh

Redevelopment in the city centre. Image credit: Magnus Hagdorn via Flickr

A Shortage in Properties

While businesses are flocking to Edinburgh taking up old and new commercial spaces, new homes are not being built to accommodate their employees. With such a lack of residential properties for a rapidly growing city, Edinburgh’s rental market is in a state of high demand and low supply.

A recent study by property consultancy JLL has looked at the property market and building industry in Scotland. The UK as a whole is going through this shortage of homes, which has been bolstered by the latest political and economic outlooks caused by the recession and, more recently, Brexit. What makes Edinburgh different is that the city continues to grow.

Director of JLL’s Residential Team, Jason Hogg, has said:

‘Housebuilding in Scotland continues to persevere against the backdrop of political uncertainty. The industry is in a confident and optimistic mood, buoyed by strong demand for residential in key city centres.

“However, there’s no doubting that the key challenge for the year ahead is to address the shortage of supply.”

View of Edinburgh from Calton Hill

The Edinburgh cityscape. Image credit: Moyan Brenn via Flickr

What Does This Mean for Investors?

As a result of their study, JLL predicts that due to this shortage, house and rental prices will rise by 23.5% by 2021. That’s almost double the UK average and significantly higher than London by 4%.

This means that if you want to invest in Edinburgh property, now is the best time, before prices rise any further. But it also means that rents are likely to rise as people looking to buy are priced off the property ladder and demand for rental properties surge.

JLL’s study shows that by 2021, tenants will likely be paying 20% more to rent than they are now. To give you an idea of what this could be, the current average asking rent in Edinburgh is approximately £1,500 a month, so by 2021 the average rent in the city could rise to £1,800 a month.

Edinburgh University

Edinburgh University. Image credit: Alberto Garcia via Flickr

Other factors To Consider

It’s not just new commercial buildings and refurbishments, and an influx of new workers creating such demand for properties in Edinburgh. The focus on new student accommodation is also a factor.

Home to three universities and a number of colleges, Edinburgh is a hot spot for students and the past year has seen a boom in student accommodation. Some of this accommodation are  managed purpose-built flats and halls that investors can rent to students. Others are traditional individual properties that investors will adapt to create bedrooms to rent out to groups of students. This latter option often means fewer properties are available for families and professionals, again hiking up the demand.

For the property investor, this means that not only is Edinburgh a great place to invest in right now, but there are a number of options available. It’s worth doing your research and speaking to a professional agency or estate agent to make sure you’re investing in an Edinburgh property that will suit you.

If you’d like to find out more about investment options and properties in Edinburgh, get in touch with us today.
Want to know more about Edinburgh? You might be interested in our 11 Facts About Edinburgh you Might Not Know.

11 Facts about Edinburgh You Might Not Know!

Edinburgh is a beautiful city, steeped in culture and history, and teeming with a range of stunning architecture. But how much about this fascinating place do you know? Here are a few fun facts about Scotland’s capital that you might not know:

UNESCO Edinburgh
1. Meet me in Auld Reekie!
Edinburgh’s nickname is Auld Reekie (Old Smoky). This comes from the time that coal and wood were predominately burnt for heating, filling the air of the city with smoke.

Old Edinburgh Fire Brigade
2. And where there’s smoke, there’s fire!
Edinburgh was the first city in the world to have its own fire service. In 1703, after a series of fires devastated parts of the city, The Edinburgh Act was passed, and a ‘Company for Quenching of Fires’ was formed. This first brigade was made up entirely of volunteer firefighters.

Castle Rock in Edinburgh
3. Castle Rock hides an explosive secret!
The large rock Edinburgh Castle sits upon is actually an extinct volcano! But rest assured, the volcano last erupted over 350 million years ago. The crater of the volcano is named “Arthur’s Throne”.

Edinburgh Castle is home to another famous stone of destiny
4. Edinburgh Castle is home to another famous stone.
The Stone of Destiny, which is still used during the crowning ceremonies of English monarchs, is kept in the castle. After being captured by Edward 1st in 1296, it was finally returned to Scotland in 1996. It was last used in the coronation of Queen Elizabeth II, when it formed part of the coronation chair.

Sherlock Holmes
5. From famous stones to famous detectives.
Writer Sir Arthur Conan Doyle, an Edinburgh native, apparently based his most famous creation, fictional detective Sherlock Holmes, on the then President of the Royal College of Surgeons of Edinburgh, Professor Joseph Bell.

Edinburgh UNESCO City of Literature
6. A literal City of Literature.
Conan Doyle isn’t the only famous literary figure to emanate from Edinburgh. The likes of Robert Louis Stevenson, Muriel Spark, Irvine Welsh and Sir Walter Scott were also born in the city. In fact, thanks to its long heritage of literary prestige, Edinburgh was the first city to be named UNESCO City of Literature. And there’s the famous local legend of J.K Rowling writing the first Harry Potter book in an Edinburgh café!

Other famous literary names from Edinburgh
7. Other famous names sure to ring a bell.
And it’s not just famous writers that Edinburgh has given us. Sir Sean Connery, Ronnie Corbett and Alexander Graham Bell, inventor of the telephone, all come from the city.

Edinburgh Zoo
8. Edinburgh’s most exotic residents.
Edinburgh Zoo – the city’s second most popular tourist attraction – is the only zoo in the UK that is home to koalas and pandas. Koala Territory, opened in 2005, currently houses 3 koalas, while Yáng Guāng and Tián Tián the giant pandas were loaned to the zoo by China in 2011.

Edinburgh Fringe Festival
9. The city attracts a lot of visitors too!
The population of the city doubles during August, aka festival season! From 500,000 to over a million. The Fringe Festival is just one element of Edinburgh’s tourism trade, and industry that brings over 15 million visitors to the Scottish capital every year.

A Taste of the High Life, Scottish Whiskey
10. A Taste of the High Life.
This northern city is also famous another export: Whiskey. Scotch whiskey has attained such a high reputation that forty bottles are shipped abroad every second! And Edinburgh is the biggest contributor to this £3billion industry, with a variety of distilleries and specialist bars scattered across the city – including a fabled distillery at the foot of Edinburgh Castle: The Scotch Whisky Experience.

Scotland's Unicorn and Flag
11. A Touch of Magic.
While you ought to know that Edinburgh is the capital of Scotland, you may not know that Scotland’s national animal is… The unicorn! How fun is that?! Although for a city that inspired Harry Potter, it’s perhaps not so surprising.

There are so many fun sides of Edinburgh to be discovered, it’s no wonder that people flock to visit, work and invest in the city.

If you want to know more about this spectacular city and why you should consider investing in property there, take a look at Why Invest in Edinburgh.