Buy-To-Let in Edinburgh: it’s Better but it’s Changing

It’s been a while since we took a look at the buy-to-let market in our backyard – Edinburgh. Much has happened; the cost-of-living crisis, restrictions on rent increases and the disastrous mini-budget in September 2022.

Incomes have been squeezed for both tenants and landlords and demand for rental properties soared in the face of spiralling interest rates, caused by the previously mentioned budget.

That was then; fortunately the market has since found its feet and after a period of uncertainty appears to be back on an even keel.

As property professionals with years of experience of the buy-to-let market in Scotland, and Edinburgh in particular, we’ve been riding the rollercoaster as well so we can give you our personal view of how things stand now.

So let’s see how the buy-to-let and rental markets in Auld Reekie are doing in 2025.

Edinburgh – a quick recap

For the benefit of anyone just emerging from the Jurassic period, Edinburgh is the capital city of Scotland, home of the Scottish Government, generously endowed with at least four universities and hugely popular with tourists.

It was home to the Scottish Enlightenment, the backdrop to innumerable court intrigues, the home town of John Knox, known for his sense of humour and wild parties and stomping ground of Rabbie Burns, amongst many others.

It has a nominal population of around 563,000, however during the Edinburgh Festival this balloons to nearer 1 trillion – just ask any resident! This means that accommodation is always at a premium, good news for landlords.

When including the population of Lothian, the figure rises to circa 858,000.

The Private Rented Sector in Edinburgh

Edinburgh has long had a flourishing rental sector thanks to constant demand for accommodation. Whether it’s Houses in Multiple Occupation (HMO) for students or suburban homes for families working in the city, demand is steady.

According to the City Of Edinburgh Council’s Draft Housing Strategy, fully 23% of Edinburgh’s housing stock is accounted for by the PRS, well above the national average of 13%. Rents are also higher than the Scottish average.

Given the nature of the city, this shouldn’t really be a surprise. Leaving aside permanent residents, it has to accommodate a considerable number of students every year and a high level of tourism.

For these demographics, rented accommodation simply makes for sense, as only the minority will ever become permanent residents. Consequently short-term-lets (STL) abound, aimed at the transient, tourist market.

This sector has seen another significant change since we last looked at Edinburgh, with licensing of STL properties being introduced in October of 2023. This may have caused some landlords to either sell or switch to longer-term renting.

While not as spectacular as in recent years, rents continue to rise in Edinburgh according to the Office for National Statistics (ONS):

Property prices in Edinburgh as also holding up well, as shown in this chart, also from the ONS:

As you can see, in early 2025, Edinburgh was out-performing both the Scottish and UK averages. This is against a background of decreasing housing stock on the national level.

While the Scottish Government, like its UK counterpart, is keen to see more house building, at present the supply/demand equation is skewed, causing issues for those seeking homes, but potentially benefiting those selling or seeking to let homes.

This pressure on supply south of the river Forth, is driving home building in Fife and the Borders, both of which are within commuting distance of the capital.

Buy-to-let in Edinburgh

How does this broader housing environment affect prospects for would-be property investors in Edinburgh?

As ever, where you look to invest within the city can have a marked effect on your outcome.

There are several areas of the city which are delivering good returns as this table from TrackCapital indicates:

These postcodes encompass areas such as Leith, Granton, Saughton, Craigmillar, Burdiehouse and Liberton, amongst others. Many of them have suffered from significant deprivation in years past, but all are showing signs of regeneration.

This is a pattern which will be familiar to many investors, as demand drives buyers and tenants into areas previously less popular, but which as a result of this influx of newer residents show continuing improvement, becoming ever more attractive.

Buying property with tenants in situ

This is an option which we have written about extensively and may be a good approach if you are thinking of investing in a well-established market such as Edinburgh.

We’ll point you at our most recent thoughts on the subject, but you’ll find that our website has lots of advice on this subject.

Advice from the property pros

It is a truth universally acknowledged that Edinburgh needs the PRS and a supply of new landlords to meet the needs of its population. The numbers alone indicate this to be the case, with the PRS housing far more than the national average.

This is true before you factor in the seasonal surges caused by tourism which turbo-charged the STL market some years ago. Local concerns in part led to the introduction of licensing, which may have affected this market sector.

We haven’t been able to find any figures for the number of landlords who have pivoted away from holiday lets to long-term letting, but the amount of advice from agents online suggests that this may have been ‘a thing’ in 2023/24.

Like any major city, where you invest is crucial, depending on your circumstances. It is possible to buy property with the prospects of excellent returns and good capital growth, but it’s unlikely to be on the Royal Mile!

The constant demand for accommodation has seen the market expand into areas of Edinburgh where in years past simply wouldn’t have been considered. The consequences have, overall, been very positive.

Leith is a good example. Once largely shunned by renters unless they had no other options, it has been transformed over the years into a vibrant, cosmopolitan and desirable area, with demand and returns reflecting this change.

While Fife and the Borders may offer excellent value-for-money, both to tenants and landlords, there will always be a core of potential renters who want to live in the city itself, and as a result, there is money to be made in meeting that demand.

Buying a property with tenants in situ may well be a good option if you are determined to invest in a more established area of the city.

Edinburgh is a mature investment market and should be approached as such, but if you do your due diligence you’ll find that buy-to-let in Edinburgh is still an exciting and profitable undertaking.

In summary…

Although Edinburgh is a mature buy-to-let market, that doesn’t mean that there aren’t plenty of opportunities to invest and profit.

With years of experience in the market and with a focus now on serving landlords (and would-be-landlords), we believe we are ideally placed to help from the first step of your journey to its conclusion.

Whether it’s a single property or a complete portfolio, we can offer advice and suggestions to help you make the best decisions for your circumstances, so drop us a line or pick up the phone.

Edinburgh is a great city, with a great future, we can help you be part of that.

Thank you for reading!

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

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