By Chapmans Property Management
Are rents still rising in Edinburgh or has the market finally levelled out?
It’s a question we’re being asked regularly by landlords across the city. The honest answer sits somewhere in between.
The Edinburgh rental market remains strong but it has definitely shifted. Growth has steadied and what we’re seeing now is a more measured environment. In our experience, this is a reset that brings a more sustainable footing for landlords who adapt to it.
From Momentum to Alignment
Over the past few years, the Edinburgh lettings market has been driven largely by momentum, with demand outpacing supply to such an extent that pricing often took care of itself. That dynamic has now shifted.
Today, performance is shaped far more by alignment between the property, the asking rent and the expectations of the tenant. When those elements come together, properties continue to let well. When they don’t, the market responds quickly.
A Return to More Natural Conditions
As we moved through 2025, rental growth slowed noticeably, from modest increases early in the year to almost flat by year end. This is a clear contrast to the sharp post-pandemic rises, where some rents increased by over 20% in a single year.
What’s driving this change is not a lack of demand, but affordability. Tenants still want to live in Edinburgh, but they are making more considered decisions about what they can comfortably spend.
For landlords, this marks a return to more natural market conditions which are less reactive, more predictable, and ultimately more stable.
What We’re Seeing Across Edinburgh
Average rents across Edinburgh are currently sitting at around £1,500 pcm, with only modest annual movement. Beneath that headline, the trends are clear:
- 1 and 2 bed properties remain the most in-demand
- Well-presented homes continue to let within a matter of weeks
- Tenants are more discerning, particularly at higher price points
We’re seeing a growing distinction between properties that are aligned with the market and those that are not. Where alignment is right, results remain strong. Where it isn’t, the response is immediate:
- Longer time to let
- Greater price sensitivity
- Fewer competing applicants
The Reality Behind Peak Rental Figures
One of the more important conversations with landlords this year centres around expectations.
In late summer and early autumn 2024, the market reached something of a high point.
For some Edinburgh rental properties, the figures achieved during that period were exceptional, and they are not necessarily repeatable today.
If a property has not materially changed, it may not reach the same rent in the current market.
In many cases, holding a good tenant at a strong and sustainable rent ( avoiding unnecessary void periods) will deliver a better long-term outcome than pushing for a marginal increase.
Supply, Demand and a Healthier Balance
After several years of imbalance, the Edinburgh lettings market is settling into a more even dynamic. Stock levels have improved slightly, while demand has softened from its peak. Tenants have more choice and that is shaping behaviour. Competition allows well-positioned properties to stand out on merit, rather than relying on scarcity alone.
Policy Changes: A Subtle Shift in Supply
Alongside changes in demand and affordability, policy is beginning to play a more visible role in the Edinburgh rental market.
From April 2026, second homes will be subject to a 300% Council Tax premium which is a significant increase designed to encourage more properties back into residential use.
We are already starting to see early signs of this, with some owners reassessing and bringing properties into the long-term rental market. Over time, changes like this are likely to contribute to the more balanced conditions we’re now seeing.
The market is no longer shaped by demand alone. Policy and long-term viability are increasingly part of the picture.
Quality Is Now the Deciding Factor
One thing that is very clear, quality is now expected, not optional. Tenants are placing greater emphasis on condition and finish, energy efficiency and running costs and the overall feel of the property.
Properties that meet these expectations continue to perform well. Those that fall short are far more likely to stall.
Encouragingly, improvements do not need to be extensive to have an impact. Targeted improvements, from décor to lighting and furnishings, can make a difference to demand and achievable rent.
Local Market Insight
While city-wide trends provide context, performance continues to vary by area.
- Leith has seen strong growth following the tram extension, although momentum is now easing into more consistent patterns
- Dalry and Haymarket have experienced increased supply, which has cooled previous rental growth
- Newington has emerged as a particularly strong performer, driven by demand from students and young professionals
- Stockbridge remains consistently desirable, especially among international tenants, although yields remain tighter
At the same time, HMO properties are facing greater pressure outside the peak student letting window, with increased competition and changing tenant expectations influencing performance.
A Change in Tenant Behaviour
One of the more interesting developments has been a shift in tenant behaviour. Activity at the start of 2026 has been stronger than expected, with higher levels of movement in January than is typical.
This suggests demand remains robust but is now less tied to traditional seasonal peaks. For landlords, this creates opportunity, but also reinforces the importance of being ready to respond at the right time.
What This Means for Landlords in Edinburgh
In this market, there are fewer shortcuts but clearer fundamentals.
We’re seeing the strongest results where landlords focus on:
- Accurate pricing from the outset
- Presentation that reflects tenant expectations
- A clear understanding of the target tenant
- Retention where a tenancy is working well
There is less room for overpricing or relying on market momentum to compensate for presentation. But equally, well-positioned properties continue to perform with consistency.
Looking Ahead
As we move further into 2026, the outlook for the Edinburgh rental market remains positive.
Demand continues to be underpinned by the city’s appeal to professionals, students and international tenants. But the conditions have changed.
This is now a market that rewards consideration over speed, and strategy over assumption. And in many ways, that creates a stronger foundation for long-term investment.
If you are reviewing your rental property, your pricing and a tailored, informed approach will make all the difference.
If you’d like a clear, tailored view of where your property sits in the current Edinburgh market, we’re always happy to talk things through.
Contact our team or explore our Landlord Services. You can also book a no obligation discovery session with a member of our team.
