Generation Rent: The tenants being squeezed out by Edinburgh's housing crisis
The pressures of living with the fastest rising rents in the UK
“I’m very fortunate that my rent is pre-covid price and before the recent kind of rates. My partner and I currently pay £875 between us, but if this flat were to be rented today it could easily be £1200 plus.
“If we were told to vacate or had to leave the property for any reason, I feel we would have to leave Edinburgh.”
The Edinburgh Inquirer is a reader-supported publication. To receive our regular newsletters and support our work, consider becoming a free or paid subscriber.
George, 32, owns and runs the Dalry Bicycle Depot. He is at a point in life where he wants to make plans, maybe start putting down roots.
Instead, he faces a stark choice - stay in a flat that is too small for, among other things, raising a family, or move out of the city.
It is a well-worn path. One that has so often in the past led to buying or renting in the Lothians or Fife and taking on a longer commute.
What is different now is the degree to which living in Edinburgh is financially punishing for tenants like George.
The so-called “generation rent” might love living in Edinburgh, but the city doesn’t love them back - not when it comes to the cost of living here.
With rents already among the highest in the UK and the fastest rising, at around 16% a year, of any UK city, the problem is acute and getting worse.
Citylets has warned in its quarterly market reports that “agents note they have never operated in a more competitive market (for renters)”.
The average two-bedroom flat in the Capital now costs a staggering £1,362 a month to rent. That’s a massive 78% rise over the last 10 years. By comparison, the minimum wage has risen from £6.31 an hour to £10.42, an increase of 65%.
The equivalent property in Glasgow (average rent £1,143) would be more than £200 a month cheaper - adding up to a saving of more than £2,600 over a year. Move to Aberdeen (average rent £747) and you could save £7,400 a year in rent.
George and his partner rent a one-bedroom flat in Polwarth. It’s nice enough, but far from millionaire’s row.
Once their rent and bills are covered (council tax, power bills, Internet, but not the cost of food, going out or anything else), anywhere between 50 and 75% of their income is gone, depending on how good a month it has been for the business.
“Savings are zero, or next to zero, each month, so the thought of having to save 10% for a deposit (perhaps £18-20k) seems impossible. Even if we could lock some money away, by the time we had that amount house prices would have gone up drastically - making the goal even higher.”
George is not alone. According to Finder.com, half of UK residents have £1000 or less in savings, and 27 million brits (51%) would not be able to live off their savings for more than a month.
Asked whether he would consider renting or even buying outside Edinburgh, George says: “Absolutely! We have talked about it numerous times, whilst we like the convenience of city living, we figure that if we want to buy or have kids etc, it’ll likely not be within the city.
“We don’t really live lavishly, or in a very restricted way, but usually two or three weeks after payday we’re left with little to nothing, and really have to hibernate until the next pay day.
“We maybe go out for dinner once a month and will spend around £40-50 on a meal for us both and that will be our monthly “treat”.
“That could give us an additional £600 per year towards our savings, but it hardly seems worth doing absolutely nothing and not socialising for a seemingly impossible goal.
“A small number of friends and people we know have bought in recent years, but I can’t recall any that did not have help from their family. There might have been one person, but they are the highest paid person I know!”
The Institute for the Fiscal Studies reports that the overall proportion of the population in the UK living in rented accommodation has risen to 35%.
Affordable housing is defined by the housing charity Shelter - whose campaigning prompted Edinburgh to declare a formal “housing emergency” designed to kickstart action - as costing “no more than 35% of your household income after tax and benefits”. Despite this, the average household who don’t own their own property spends 42% of their income on rent. For many in Edinburgh, like George, that figure is far higher.
Rent cap stalls moves
There are many and varied factors fueling Edinburgh’s housing shortage.
Among them is a shortage of affordable or social housing, while campaigners have pointed to the number of residential properties that have been turned into Airbnbs, a trend the city is starting to reverse with its holiday let licensing scheme.
Competition is also fiercer because fewer properties are coming onto the market in the wake of the Scottish Government’s imposition of rent controls.
Tenants are staying put longer - the 3% cap on the rise of rent each year that the controls impose is preferable to the cost of moving to a new rental property.
Many landlords, facing higher mortgage rates and knowing they are restricted in the increases they can make to rents during a tenancy, are hiking them by far more when there is a tenancy break to be confident of covering their own rising costs.
The city’s growing student population has brought many benefits to the city, including attracting popular brands like the Apple store, but it is putting further pressure on its housing stock.
The latest Edinburgh by Numbers statistical report compiled by the city council states there are nearly 70,000 students enrolled in higher education across the city. Despite the large number of student flats being built across the city, there are only around 30,000 beds in dedicated student housing complexes.
So, where do the extra 40,000 students stay? The majority team up with others to rent a shared flat, creating enormous competition for tenement flats in particular.
After spending five months in a fruitless search for somewhere within her budget, Leona Reid, who is studying Interior Design at Edinburgh Napier University, took on a flat that she could not afford.
“Me and my flatmate are both 4th year students and started looking for a flat in May. The lack of affordable flats was shocking, average rent used to be around £400-500 for a room in a shared 2/3 bed flat when I first moved out (of student halls after first year), and now we couldn’t find anywhere under £600/700 each.
“Even if we did find affordable flats, no one would get back to us regarding viewings. I have no clue what they look for when they are considering who to invite to a viewing. We met all the requirements and are mature students, but that wasn’t enough.
“Overall, we applied for more than 100 flats and had five viewings. It’s impossible. We finally found a flat, but it’s way out of our price range. We had no choice really and had to accept it as we were so desperate.”
Leona’s outgoings are more than she has coming in. She receives £550 from a student loan and £450 from part-time work. Her rent, power bills and wifi come to £850, leaving £150 for travel, food and everything else.
“I have no social life at all - and basically no budget for food. I am using my savings just now – but it wasn’t intended for groceries and bills. I have a little in my savings account that was supposed to be for when I graduate. If I have no job lined up, I will need the money then.”
The new arrival professional
Andre Alves Garzia, 43, is a technical writer from Brazil. He moved first to London before arriving in Edinburgh last year.
“When I lived back in Brazil, I was staying in a flat that belonged to my parents, it was all paid off, so I didn’t have rent or a mortgage to pay then. When I moved to London, I was very surprised at how expensive it was. I knew I was staying very central, and you pay very much for location.”
Andre stayed 15 minutes’ walk away from Kings Cross station and was paying £1800 for a 2-bedroom flat. He knew even that significant price was a steal for where he was living. Andre recommended the flat to a friend when he moved out, but the rent had been raised to £2,300.
“When I moved to Edinburgh, I wanted a new start, and it was a big change. When I was searching for properties, I would see maybe fifty or so that fit my budget. When I filtered it by ‘pets allowed’, it showed me only four. I have brought my cat Cleo all the way from Brazil, I have had her for seven years. The flat I am in is the one that was the cheapest of those four results.”
Andre’s studio flat comes with an enviable range of amenities, including access to a small library, rooftop bar, two dining rooms, a cinema room and a gym. The downsides are that he has no separate bedroom - and it costs him £1500 a month.
Andre spends around 65-70% of his monthly wage on bills and rent. He doesn’t have any savings after investing what he had to secure his flat in London.
His latest move was the result of a breakup with his wife. That meant facing an increasingly common dilemma in modern Britain - do you spend above your means and make sacrifices to have your own space, or share with a potential stranger to save money?
“For now, I am okay, but I am conscious that I either need to make more money or move.”
In the meantime, he economises on his food shopping, planning meals ahead to save money, and cuts down on ‘treats’ like buying coffee out.
“When I moved here, I had to just take whatever was available that allowed pets too. I didn’t want the stress of not having somewhere to stay. Although there are lots of facilities like a games room and large work spaces, this is clearly too expensive for my current budget.”
Andre knows that he is a fortunate position and that for others the city’s spiraling rents spell much more serious problems.
The housing campaigner
EIlidh Keay, the Edinburgh Chair of the tenants’ union and campaigning organisation Living Rent, says rising rents are causing extreme hardship and are one of the main reasons for a dramatic rise in the number of people declaring themselves homeless in the Capital.
“It's pushing more and more people into poverty, crammed homes and desperate situations. Too many people are couch-surfing, subletting or being forced into homelessness,” she says.
Living Rent are campaigning for tighter rent controls and more rights for tenants to protect them from eviction should they fall into arrears. Landlords warn that such moves would lead many to sell up and leave the rental sector altogether.
Angus, who is a landlord in the Capital, has a great deal of sympathy for the tenants who are scrambling to find anywhere affordable to live.
“We do have far too much demand and in one case I had an overseas student offering six months rent up front to secure a flat.” he says.
“Because of rent control, when re-letting many landlords are hiking up the price because they know they will be restricted during the tenancy. It’s a complex situation, but it also will result in existing tenants being reluctant to move as prices have risen.”
Increased mortgage rates have left many landlords like Angus with no choice but to increase what they charge their tenants or to sell up and get out of renting altogether.
“To be clear, we are not wanting to raise the rent so much, but we are having to put rent prices up due to an increase in lending rates. Some lenders have rejected re-mortgaging applications because the rent charged is not enough.
“The elephant in the room was the Section 24 tax change (which reduced rent relief for landlords and was fully implemented in 2020). That was effectively a tax on renters and pushed out lots of landlords, particularly smaller ones in a similar position to me.
“I really do care about looking after my tenants, I have never increased rent mid-tenancy, but have had to for the first time.”
The Edinburgh Inquirer is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.