In recent years, Edinburgh has been featured in plenty of articles on the best places in the UK for buy-to-let investment, and for good reasons. Today, we want to share some of the reasons why buying a rental property in Edinburgh is a good investment. We’ll also share some of the best neighbourhoods for buy-to-let investment and what you need to know about becoming a landlord in Scotland. Let’s get right to it.
Why invest in property in Edinburgh
Edinburgh is a city with a large renter population, good rental yields and steadily increasing property prices, making it a great place to invest in a buy-to-let property.
The city has four universities, which means Edinburgh has a large student population. It’s also home to large finance, tech and creative sectors. Students and young professionals in Edinburgh mean there’s always lots of demand for rental properties across the city.
Yes, there are cities within the UK with more affordable property prices (the average house price in Edinburgh was £293,406 in 2021). However, it is those high rental yields (often well over 6%) as well as the large number of renters in the city that make Edinburgh worth the investment.
Additionally, property prices fluctuate greatly from one area of the city to another. While a flat on Regent Terrace, New Town, will set you back an average of £400,000, the average flat price on Easter Road in Leith is much lower, at £188,886.
Best areas to buy property in Edinburgh
1. Haymarket, Dalry & Gorgie
The EH11 postcode, especially the neighbourhoods of Haymarket, Dalry and Gorgie, is home to some of the best property deals at the moment.
Located within easy access to the city centre, these neighbourhoods, once home to factory workers, have seen lots of regeneration in recent years. Plots of lands that were sitting empty for years have now started producing new office and leisure spaces as well as student accommodation and luxury flats.
With these new developments, the area’s very reasonable property prices are expected to rise in coming years, so now is the time to buy.
2. Leith
Falling into the EH6 and EH7 postcodes, Leith is a firm favourite for landlords and renters alike. The area has gone through a lot of regeneration in recent years and is home to plenty of nice bars, restaurants and local businesses.
The area is known for reasonable rents and property prices and was recently voted 4th in world’s 50 coolest neighbourhood rankings for 2021, according to travel magazine Time Out. With Edinburgh tram lines being extended down Leith Walk and all the way to Newhaven, buy-to-let property in Leith is about to become an even hotter commodity.
3. Newhaven, Trinity & Granton
These neighbours of Leith in North Edinburgh are more residential areas perfect for young people looking to settle down but still have easy access to the city centre. With their seaside location and easy access to the city, it’s easy to see why these areas are popular.
Newhaven and Trinity both sit within the EH6 postcode, with average rental yields over 6% and average property prices just over £200,000. As we already mentioned, the Edinburgh tramline will soon reach Newhaven and will make these neighbourhoods even more in demand.
Granton Waterfront is now in the middle of a large regeneration project, promising new net zero carbon homes, green spaces, business opportunities and arts and leisure facilities. These developments make this a good area to invest in right now.
4. Newington
Newington, a residential area justy south of Old Town, is home to a large student population thanks to its proximity to the University of Edinburgh. The walkable neighbourhood has a village feel, with lots of cafes and inexpensive eateries as well at the popular live music venue, Queen’s Hall.
Newington is a good option especially for those looking to invest in an HMO student property, with a new horde of students moving to the area every September. It’s also only a 20-minute walk from Princes Street, making the area popular also with young professionals working in the city centre.
What you need to know about buying rental property in Scotland
If you’ve not bought a property in Scotland in the past, there are a few things you need to know.
First of all, instead of stamp duty, property purchases in Scotland are subject to Land & Buildings Transaction Tax (LBTT) instead for properties with a purchase price over £145,000. When it comes to buy-to-let property, you also need to pay Additional Dwelling Supplement (ADS) of 4% the purchase price for properties over £40,000.
As a landlord, you’re also responsible for the safety and suitability of your property for renters. This means having to make sure your property is compliant with strict gas and fire safety measures, among other things. You also need to make sure each bedroom and shared living areas meet the minimum requirements set by the local council.
You’ll also likely need to get a specialist buy-to-let mortgage, landlord insurance and register as a landlord with the local council. You can visit the mygov.scot website for more information on your responsibilities as a landlord.
Edinburgh buy-to-let property management
Working with a property manager makes the whole process of being a buy-to-let landlord smoother. We’ll help you find the right tenants, handle all the necessary paperwork and deal with ongoing property management on your behalf to ensure that you are fully compliant with the everchanging rules and regulations governing the industry. Furthermore, we will never add a commission or mark up to any maintenance works arranged on your behalf. Our goal is to offer peace of mind for Edinburgh landlords. You can read more about our property management services here.
