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Dundee Buy-to-Let Guide

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    Everything You Need to Know About Dundee Buy-to-Let

    The Dundee property market has garnered a reputation in the buy-to-let scene as one of Scotland’s most affordable cities to invest in, and its profile as a ‘cool’ destination has been raised in recent years.

    Located in the historic county of Angus, this coastal city is known as the home of ‘jute, jam and journalism’, but is it also home to some lucrative UK buy-to-let opportunities?

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      Buy-to-Let Property Prices in Dundee

      According to Rightmove, properties in Dundee had an average price of £167,661 in 2023. This is much cheaper than the overall UK average house price, which was £287,782 in October 2023, per the HM Land Registry.

      But this figure is 2% down compared to 2022. This is characteristic of the UK property market, which is currently experiencing sluggish growth, with subdued growth and small amounts of negative growth observed in different areas.

      But are house prices in Dundee set to continue falling? Property experts Savills forecast an optimistic outlook for Scotland over the next 5 years, predicting growth of 9.5% leading up to 2027. This is higher than the projected growth for the UK as a whole, which is 6.2% and good news for Dundee’s property market.  Why not learn more about the Edinburgh property investment market with our dedicated property guide.

      Learn More: Whether you want to know how long a short-term let is or the latest buy-to-let stamp duty tax, our expansive investment guides cover a wide range of topics!

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      Buy-to-Let Rental Market in Dundee

      According to housesforsaletorent.co.uk, the average monthly rent in Dundee is £748 PCM. This is significantly cheaper than the average UK rent of £1,268 PCM, per the HomeLetRental Index.

      According to Zoopla, Dundee had one of the highest average gross rental yields in the UK in late 2023, coming in second place in their ranking. They calculated the average to be 7.85% based on the assumption that the average rent is £768 per month and the average price of a buy-to-let property in the area is £117,500.

      Zoopla’s Rental Market Report for September 2023 also stated that Scotland achieved the highest rental growth in that period, with rents for new lets being 15.6% higher in Dundee.

      The area also boasts good transport links to Edinburgh and Glasgow and a significant student population that can be targeted for student accommodation buy-to-let.

      More Information: Listen to the RWinvest Property Podcast for more insight into the UK rental market as a whole!

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      Buy-to-Let Investment in Dundee: Area Breakdown

      Dundee can offer various types of property investment opportunities depending on the area.

      The City Centre and West End are popular with students and those who wish to be close to amenities and employment opportunities in central Dundee.

      To the east, there are more upmarket suburbs like Broughty Ferry, while more affordable property can be found in western suburbs like Lochee.

      Average Property Prices in Dundee City Centre

      The average property price in this area is £123,618.

      Average Rental Yield in Dundee City Centre

      The average rental yield in this area is 7.14%.

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        Broughty Ferry

        Average Property Prices in Broughty Ferry

        The average property price in this area is £220,443.

        Average Rental Yield in Broughty Ferry

        The average rental yield in this area is 4.50%.

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        Lochee

        Average Property Prices in Lochee

        The average property price in this area is £91,041.

        Average Rental Yield in Lochee

        The average rental yield in this area is 9.98%.

        (Average property prices were taken from Rightmove in late 2023, and rental yield estimates were calculated with figures from housesforsaletorent.co.uk in late 2023)

        What is the Best Area of Dundee to Invest in?

        Property in Dundee’s nearby towns can be pricier than in more central areas, so if you’re targeting commuter renters, it could be advisable to look towards cheaper towns like Tayport in Fife.

        Eastern suburbs like Broughty Ferry can offer a decent rental yield, but more affordable areas like Lochee can offer very high yields thanks to the cheap property on offer.

        Another hotspot for high rental yields is the City Centre. This could be due to the number of student rental properties there, which often have a higher rental yield than standard residential rentals

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          Why You Should Consider a Buy-to-Let Investment in Dundee

          Growing Tech Industry Hub

          Dundee is famous for its video game industry and is the birthplace of the internationally popular game Grand Theft Auto. This global reputation has helped facilitate massive growth in Dundee’s technology sector. This includes software, business solutions, ICT, robotics, games, media, screen production, analytics, AI, and cybersecurity.

          Dundee’s connection to video games has even led to the development of an esports arena set to open in 2025 as part of the city’s £1 billion waterfront regeneration. Abertay University is also recognised as Europe’s leading games school.

          Dundee plans to become a ‘smart city’ through substantial investment in the digital sector.

          Student Population

          Dundee’s student population ratio is 1:5, the highest in Scotland and one of the highest in the UK overall. There are two universities in the city, the University of Dundee and Abertay University. The University of St Andrews is also just 14 miles away.

          In 2021, it was named one of the most fun cities to be a student in, and it was voted one of the best student cities in the UK in 2022. It’s no wonder, then, that this small city keeps attracting students to live and study there.

          There are some downsides to investing in student accommodation, such as frequently changing tenants, but it can often command higher rental yields than standard residential properties as several students usually wish to live together, and landlords charge per person.

          Looking at student property investments for sale in prominent areas is a good way to ensure consistent rental demand for a property, as there is a guaranteed influx every year.

          modern apartment building in city. front exterior of newly built apartment block with balconies. city living in the UK

          Dundee New-Builds

          The Strategic Housing Investment Plan in Dundee aims to deliver hundreds of new build homes across the city by 2029.

          As a popular area to live in, Dundee has also been drawn to by private developers as a place to target for new building developments.

          This means diverse investment opportunities exist, including houses, apartments, and student accommodation.

          Purpose-built student accommodation is gaining popularity as a lucrative buy-to-let investment strategy. Looking at student cities like Dundee is a good way to find opportunities to invest in this growing sector. It’s also worth looking at other options for student hotspots, like Bath new-build accommodation.

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            Off-Plan Property in Dundee

            Investing in Dundee property ‘off-plan’ also makes it possible to get a good deal on a newly built property, essentially investing while the development is still in the planning or construction phases.

            New-builds are usually more expensive than older properties, but off-plan investing has emerged as a way to acquire a new property at a lower price point.

            However, most opportunities for this kind of investment are still to be found in larger cities.

            Examples include Liverpool and Manchester, where investing off-plan in purpose-built student accommodation is also possible.

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              How Does Dundee Compare to Other UK Regions When It Comes to Buy-to-Let?

              Dundee has some of the most affordable properties in Scotland, and average rental yields show that there are many lucrative opportunities for property investors to find there.

              However, other major cities like Liverpool have affordable property and comparable rental yields. According to Zoopla, investment property for sale in Liverpool typically sees an average gross rental yield as high as 7.21%. Arguably, more famous cities are more in demand and positioned to enjoy better capital growth.

              Property experts Savills predict that Scotland’s mainstream capital value is set to rise by a healthy 20.2% – one of the highest projections in their forecast and the same rate predicted for the North West (one of the most significant property hotspots in the UK).

              Further Reading: Explore the North West property market with RWinvest’s guide to buy-to-let in Bootle.

              Want to Invest in Dundee in 2024?

              So, is property a good investment in Dundee?

              Dundee is a Scottish city with a lot to offer buy-to-let investors. The affordable property, demand from students, and generous rental yields are sure to keep interest in the area high.

              But other, more major cities may be more attractive to potential tenants, and have a better potential for capital growth.

              For an expansive look into the rest of the UK rental market, read some of our most recent buy-to-let guides:

              Map of Dundee

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              Author

              Jessica Ferris

              Jessica is a property content writer at RWinvest. Keeping a close eye on the UK property market, Jessica helps our readers stay informed and up to date on the latest market news and statistics.

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