November 30, 2022
Are you a landlord or an investor exploring your options to invest in Edinburgh property?
Our capital city, Edinburgh, needs no introduction. If you have ever been here even once, you can’t miss the picturesque combination of historical buildings, scenic parks and green spaces.
Of course, Edinburgh has much more than aesthetics to offer. The city has been going through a significant transformation over the past few years. If you’re a more frequent visitor or resident, I’m sure you’ll have noticed these impressive changes.
Every aspect of the economy has been getting a boost, with infrastructure projects worth many millions. This means a significant boost to an already successful and popular market. So, where can you get the inside track on how to invest in Edinburgh property?
As a seasoned Edinburgh-based property professional, I’m happy to share some good reasons to help you understand why it might be a good idea to invest in Edinburgh property right now.
Property sale and rental values update
As discussed previously in our 2020 blog post on the topic of Investment in Edinburgh, there is a steady 3 – 5% property value appreciation depending upon the locality.
The average house price in Edinburgh in August 2022 is £337,506, which is a 8.9% year-on-year increase, and prices have increased consistently since we last reported in 2020.
This represents a solid value appreciation in many of Edinburgh’s neighbourhoods and as per a Sky New report of 2019, Edinburgh’s average house prices grew by 34.5% over the last decade.
That’s higher than Glasgow, Liverpool, Leeds, Newcastle and many other popular cities across the UK.
According to a UK Government report, Edinburgh’s 8.9% house price growth is on a par with London – quite an achievement and shows a mature property market fit for investment.
Demand for rental properties in Edinburgh continues to be strong with letting agents reporting a significant number of tenant enquiries for each new listing. Amenities, employment opportunities, transport links and culture in Edinburgh all contribute to an excellent quality of life.
The Citylets report for Quarter 3 has the average rents for one bedroom at £908pm, two bed £1225pm, three bed £1737pm and four bed £2366pm, with an average time to let standing at just 15 days.
Major projects and latest developments
It’s not news that some major projects have been started in the past five years in Edinburgh. Even with the pandemic, the redevelopment of the city has been powering ahead with the promise of making it a net zero carbon city by 2030.
The new St James Quarter has offered a much needed transformation of the city’s east end, with its expansive retail area, new cinema and hotel development, and commitment to enriching the surrounding community.
The Edinburgh tram line has been one of the biggest talking points around those wanting to invest in Edinburgh property. Its reach from Edinburgh Airport to Newhaven sees a route right through Edinburgh’s financial district and popular tourist spots.
Residential properties and commercial premises near tram stops have automatically enjoyed a boost in their value and this is carried on beyond the city centre where the regenerative effects have improved transport links and commercial opportunities.
Granton waterfront continues to expand with limitless potential, offering a chance to invest in Edinburgh property beyond the more well-known areas around the city centre.
Similarly, the Shawfair development has expanded the travel infrastructure significantly by connecting some of the more outlying villages of Edinburgh with the Borders Railway Network.
Edinburgh Council’s focus upon sustainable development means this is all future ready development and property prices will definitely be positively impacted.
Build-to-rent opportunity
Build-to-rent has definitely become a talking point lately. Edinburgh has welcomed this property model and, along with Glasgow, has become one of the largest BTR cities in the entire UK.
It is not yet open for individual landlords, but you can certainly find a way to invest with BTR institutional builders and developers. The projects are regulated and signed-off by the Scottish Government, offering a much needed transparency around the process.
HMO opportunities
Being blessed with four universities, there are many Households of Multiple Occupancy (HMO) in Edinburgh. These represent an excellent opportunity, although the property standards required are higher than for single occupancy, as explained in this article.
Nevertheless, they remain exceptionally popular for student accommodation and are well worth considering, especially as a medium to longer term investment.
Advice from the property professionals
As one half of Scotland’s only estate agent for landlords, it’s been exhilarating and rewarding to see the recent changes in Edinburgh; all the more so because of what we have had to contend with during the worst of the Pandemic.
I foresee a continuing long-term house price growth based on what I’m witnessing in the market. Even the introduction by the Scottish Parliament of a controlled zone for short term lets, while noteworthy for investors, is little cause for concern where yields are concerned.
Depending upon whether you’re seeking higher yields in order to generate income, or your focus is more on capital growth, Edinburgh has something for everyone, with some great opportunities for investors.
In summary…
Thanks for reading, and I hope that if your aim is to invest in Edinburgh property, I’ve offered some solid reasons for you to proceed.
There’s a great deal of information out there about Edinburgh, and sometimes it’s good to have a helping hand to work out the facts from the hype.
If you’d like some help to explore your options regarding investment in the Edinburgh property market, please feel free to get in touch for a no-obligation consultation.
Written by Ross MacDonald, Director of Sales & Cofounder of Portolio
Get in touch on 07388 361 564 or email to [email protected]
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