BTL in Dundee: is the Sunshine City Still Glowing?

Ah, bonny Dundee, stretched languorously along the northern shore of the mighty river Tay. Once an industrial powerhouse, now, not so much. However, as we stated last time we looked at BTL in Dundee, things are looking up.

Dundee Council has an ambitious strategy to address the city’s issues, and the £1 billion Waterfront project aims to make the riverside area a better place to live and work by 2030 – only five years away now.

For property investors the city’s large student population, circa 30,000, is an attractive draw as like students everywhere they need places to live whilst studying, and Dundee has a high percentage of young adults in its population.

It’s been some years since we last looked at the Sunshine City and it’s high time we discovered whether things have changed for investors since then.

As experienced property investment professionals we always keep a weather-eye on opportunities for buy-to-let investors, and not just in the central belt.

Dundee in 2025

When last we wrote about BTL in Dundee it was awaiting the Scottish Government’s decision about the siting of the Green Freeports. Sadly, Dundee lost out to the Firth of Forth and Inverness & the Cromarty Firth.

However the city continues to drive forwards and is still a major player in the digital arts and sciences through the work done by educational institutions, especially the University of Abertay.

The city has a large proportion of 18 – 37 year olds amongst its population, exactly the demographic the private rented sector is looking for. Additionally, the city’s population is expected to hit more than 150,000 in 2030-2032.

Ongoing regeneration continues to make Dundee an attractive destination for business and those who work for them and transport links by car, rail and air are all of high quality.

The Eden project

Approval has been granted for the construction of the Eden Project on the site of the old gasworks in East Dock Street, Dundee. Given that the original project in Cornwall is estimated to attract up to 1 million visitors per year, this will be a major boost.

Apart from the initial construction jobs, the wide range of activities; exhibits, performance, learning, play, horticulture, live music, art, food and retail spaces will continue to create jobs for years to come.

The undoubted influx of visitors is also likely to have a major and continuing positive effect on the economy of Dundee, suggesting that with this in the offing now is a good time to contemplate investing in property there.

State of the Dundee property market

Since we last visited Dundee in 2023, there have been few earth-shattering changes, however as the private rented sector has settled down after the market highs which followed the global pandemic, this is perhaps to be expected.

What we are seeing is a stable market, and one which is heavily influenced by the needs of students and younger people, with one and two bedroom flats predominating in the rental pool.

The ongoing efforts to improve the built environment will undoubtedly make Dundee a more attractive place to live, learn and do business, a truth reflected in the estimates of population increase over the next few years.

Any city with a rising population should present great opportunities to those willing to invest and to provide quality, affordable housing to meet this rising demand.

Numbers and trends

The data and charts below are drawn from Citylets and the Office of National Statistics.

Average rent in Scotland

Housing stock composition Dundee Q3

Average rent in Dundee to Q3 2025

Yields in Dundee

According to Zoopla, the average rental yield in Dundee is currently 8.1%. This is a good return although new property investors may be looking for a bit more, possibly nearer 9%. The relatively low price of one and two bed flats means that Dundee continues to offer a good return on investment.

Overall the data portrays a market which in common with the Scottish market as a whole has finally broken free from the post-pandemic maelstrom and is finding a more sustainable level of operation.

Advice from the property pros

Dundee continues to be a conundrum; on one hand appearing to be a rather static market showing little change, whilst at the same time contriving to offer good returns, especially if you’re concentrating on yield rather than capital appreciation.

If capital growth is your aim, Dundee is maybe not for you, unless you’re investing in larger, more expensive properties, or you’re willing to play a fairly long game. Average prices rose by 0.7% as opposed to a Scottish average of 4%

On the other hand, with an already large student population and a growing population overall composed of a large percentage of younger people, it’s a great opportunity for buy-to-let investors, with demand still outstripping supply.

This is helped by lower than average property prices, which mean that despite the fall in rent inflation, yields in Dundee have held up well.

Comments we made in our previous guide about not being too quick to compare Dundee with the powerhouses of Edinburgh and Glasgow still hold true. Dundee is a different market, and should be approached as such.

It offers investors opportunities, especially in terms of entry costs, which the larger conurbations of Central Scotland cannot easily match, while demand ensures that rents remain stable.

In summary…

It’s not sexy, but Dundee is a solid choice as an entry into the property investment and buy-to-let markets. Attractive prices and constant demand for rental properties is a winning combination.

This makes it an attractive inclusion in a wider property portfolio as careful property selection should be rewarded with a good yield bringing in regular income. This can be combined with more capital-focussed investments elsewhere.

If you’d like to learn more, about Dundee in particular or the buy-to-let market in general, please get in touch. We’re always happy to help you find the best way to realise your buy-to-let ambitions.

Thanks for reading!

Written by Ross MacDonald, Director of Sales & Cofounder of Portolio

Get in touch on 07388 361 564 or email to [email protected]