Edinburgh Property Investment – The Best Buy To Let Areas

Invest Edinburgh – Capital Growth

Alongside the above areas for investment opportunities Edinburgh contains, the city seems not to have been affected as severely by Brexit fears and doubts as some of the other major cities in the UK. Within Edinburgh property, the best areas of investment have had an impressive past twelve months in terms of their increasing value, and those with limited capital should look toward the city sooner rather than later if interested.

Edinburgh’s property market, when looking at capital growth, shows a stark difference from the dipping trends set by London in the wake of Brexit. In the fourth quarter of 2019, it was reported that growth reached 10.6% on average, far above the national average, and from May 2018 to May 2019, the increase in Edinburgh specifically reached 6.2%.

In March 2023, prices in Edinburgh grew by 1.4% compared to the year prior, showing further indication of positive growth in the future.

Investors will surely want to look towards this city (and even more so the concentration points within it) if they want to capture that lightning-in-a-bottle moment. Locals are equating this growth with the city’s ability to withstand the political uncertainty. Not every market can come to a complete standstill while the continued EU negotiations take place, and so Edinburgh is one of the outliers- an unaffected city.

The high capital growth on offer in Scotland makes the future look bright for property investment.

While you may not get the highs of locations like Liverpool and Manchester, Edinburgh could certainly be one of the best places to invest in property UK 2024 and beyond.

For the first-time buyer looking into property investment, Edinburgh is a secure choice.

The city’s consistent achievement in terms of education also only serves to bolster the Edinburgh property investment market for years to come, as prospective students will continue to come to the area for its elite academia, and then stay for its culturally rich environment and employment opportunity. The city’s employment rate currently stands at over 76%. London is often looked upon by many as the ‘place to be’ for job opportunities, but Edinburgh clearly is a worthwhile alternative.

It’s worth noting that within Edinburgh’s vast cityscape, some areas are better protected than others for passive income. The city largely trends towards the positive end of the property spectrum, but the EH4 postcode is perhaps one to avoid, with an average rental yield of 4%. This encompasses areas that begin to branch out from the demanded city centre, including Dean Village, Comely Bank, Barnton and Cramond.

For experienced investors looking to expand their property portfolio, the property investment Edinburgh market is a recommended choice for those looking even further northwards than Liverpool and Manchester. With capital appreciation on average set to rise in the city, there is a clear opportunity to make a solid return on investment.

Furthermore, with an uninterrupted flow of student tenant demand, student property investments in Edinburgh should be another opportunity that buyers should look into if wanting to expand their horizons. Purpose-built apartment blocks and flats are easily manageable for the investor with a varied property list and can be purchased singularly or as multiple clustered investments, rooted in the area going forward as it continues to thrive.

Those unsure of how to find the best property for sale Edinburgh has to offer should look to compare both the numbers and figures generated by the different areas in the city, and what prospective tenants want from their accommodation. Factors such as transport link, local amenities and proximity to the city-centre affect the tenant interest, and the potential for capital growth and fast and high rental returns result in a more sought-after location from the perspective of the buyer.

Aside from investment opportunities, Edinburgh is considered one of the UK’s most haunted cities. The winding, cobbled streets and tall archaic buildings certainly evoke those spooky connotations that many of us associate with classic horror. The darker parts of the city’s history from the days of yesteryear include the plagues, witch hunts and executions, and even torture dungeons. The Edinburgh City Chambers, re-opened to the public in 2003, captures the feeling of stepping back in time and gives that area of the city a unique historical draw that hardly any other city in the UK can replicate.

For something a little more light-hearted, the Edinburgh Fringe Festival is an annual event that draws in thousands of tourists to celebrate comedy in all shapes, sizes and forms. From well-known comedians such as Al Murray to cult internet sensations such as Brian’ Limmy’ Limond, the variety of comics in the city during this culturally concentrated time very much echoes the sentiment and job opportunities of Edinburgh as a whole: There is something for everyone.

In 2018, the festival, which spanned 25 days across August, saw over 55,000 performances of 3,548 shows in 317 venues. It is considered the biggest arts festival in the world and an experience that does only good for the buy to let Edinburgh market and overall city economy. Astonishingly, it has been estimated that Airbnb guests alone during the Edinburgh Fringe period will boost the city economy by £48 million.

Did you know? During August, when the city’s festivals are at their highest point, Edinburgh’s population actually grows massively, making it temporarily the second-largest city in the UK.

So we’ve discussed the benefits of investing in rental property in Edinburgh in our Edinburgh property guide, but how does this Scottish city compare to other parts of the UK when it comes to investments?

For a lot of investors, particularly those from overseas, London is the first place that comes to mind in regards to buy to let. With London’s housing market struggling, however, those who buy property in Edinburgh are taking advantage of a suitable alternative to England’s capital for investors as its market continues to thrive alongside the demand. The city has multiple major keystones, such as its rich history, educational sector and sustained popularity, that all combine to make it an investment opportunity that feels like a perfectly viable alternative to London.

In terms of cost, while it does have its fair share of expensive properties, the averages still show that the best buy-to-let Edinburgh areas are far more affordable than London. Those who invest in Edinburgh can take advantage of lower prices and higher yields than in the capital. In 2023, Edinburgh’s best postcode, EH11, sat at £259,836, according to Zoopla. London’s best postcode offering, the E6 East Ham area, saw averages of £399,498 and a lower rental yield of 6.81%.

To put this into perspective, those who buy property in Edinburgh could almost purchase two properties under the EH11 postcode, as opposed to one in East Ham, and create a much more efficient passive income stream than they would in the stagnating South. The influence that the city’s heritage has over modern life in Edinburgh is apparent, and just walking along the streets as a tourist or resident today, you will notice that the history still permeates the culture.

Young professionals and students graduating in the city are increasingly looking for the perfect luxury rental property in Edinburgh, with ease of access to the area’s many amenities and facilities. As city-living becomes more mainstream and popular, this is very much the growing trend within the most popular urban areas, and many are looking to buy an apartment in Edinburgh in order to appeal to this demand. With many great business opportunities and cultural offerings in Edinburgh, not to mention better affordability, a lot of young people are choosing this city over the excessive living costs of London.

While the choice of property in Edinburgh to buy presents a fantastic investment opportunity, however, there are still areas that offer more potential. Manchester and Liverpool, for instance, have recently been hailed as some of the top UK areas for property investment. These northern cities are known to boast even more affordable house prices and attract larger levels of rental demand, which results in some very attractive rental yields of around 6-7% on average. In Liverpool, rental yields in the L1 postcode can reach heights of 10%, making this one of the UK’s best cities for rental returns.

While those who look for property to buy in Edinburgh for investment purposes are definitely on the right track towards buy-to-let success, some would argue that there are better opportunities in England’s North West region. Liverpool and Manchester certainly have a lot to offer in terms of rental yields and capital growth potential, but whether or not you opt for a North West investment instead of buying rental property in Edinburgh depends on factors such as your budget and individual goals.

For instance, buy to let in Edinburgh is less affordable than Liverpool or Manchester buy to let. This is because the average cost to buy property in Edinburgh is a lot higher than the average in the North West, particularly Liverpool, where average property prices for the city centre fall below £140,000. If you can’t decide which city to invest in and you have a large enough budget available, the best option could be to find a property in Edinburgh to buy in combination with an investment in Liverpool and Manchester. This way, you can invest in Edinburgh as well as the top-performing North West cities and benefit from a combination of lucrative returns while spreading your risk across different properties.

With five of the ten best postcodes in Scotland for rental yield, Edinburgh is one of the most consistent and secure investment areas in the north of the UK. Scotland is also seeing an increasing number of people happy to rent their homes rather than buying, meaning that buy to let Edinburgh properties should be popular going forward. In terms of Edinburgh property, the best areas for investment are as follows:

Trinity
Population: 31,414 +(Forth area)

Average House Price: £302,616 (2023)

EH6 postcode homes in-and-around Trinity are among the most lucrative buy to let Edinburgh property hotspots. A largely residential area, this northern district is one of the more suburban options in the city, making it a popular choice for young people wanting to settle down slightly, but still with ready access to the city. This postcode area contains an average rental yield of 8.71%, with the median average price sitting at £302,616.

Dalry
Population: 7,821 + (33,100 cumulatively around Sighthill/Gorgie)

Average House Price: £259,836 (2023)

The Dalry district benefits from its close proximity to the city centre, wedged in-between Haymarket and Gorgie. This makes it one of the most popular property investment Edinburgh locations. Those wanting to invest in Edinburgh should look towards this area, as the properties within the EH11 postcode are the second-highest in all of Scotland, with an average rental yield of 8.43%. These properties are among the best the buy to let Edinburgh market has to offer.

Other Edinburgh property hotspots within the EH11 postcode include Sighthill, Merchiston and Gorgie. The average asking price sits at £259,836.

Stockbridge
Population: 34,099 + (Inverleith area)

Average House Price: £548,455 (2023)

Another good area to invest in Edinburgh is Stockbridge. This area again encapsulates the picturesque, ‘chocolate-box’ aesthetic that many tourists look for when visiting Edinburgh in the summer, and it has a vibrant atmosphere filled with friendly faces, cafés and shops. The area is also home to the Royal Botanic Garden, one of the most stunning public garden attractions the UK has to offer.

A desired location for those with slightly more capital to commit, the average house price falling under the EH3 umbrella sits at £548,455, with an above-average rental yield of 6.87%.

Leith Walk
Population: 32,000 +

Average House Price: £297,641 (2023)

Spanning the EH6 and EH7 postcodes, Leith is a northern part of Edinburgh that has benefitted from new developments and regeneration and is now one of the most popular areas of the city. Many come to visit this area for its picturesque docks, the famous Leith walk, and the Ocean Terminal shopping centre which is easily accessible via walking or bus.

In the EH7 postcode, the average asking price is £297,641, with an average rental yield of 8.92%.

Newington
Population: 37,300 + (cumulatively with Southside)

Average House Price: £340,005 (2023)

One of the areas that centres around the popular EH8 postcode is Newington, which has been hailed by students as a great place to visit while studying at University. With the education sector a short walk away, it’s popular for those who want to be able to walk to and from their uni library or facilities and encompasses the feeling of a student village community. For homes falling within this postcode bracket, the average yield is a healthy 8.53%, with the price sitting at around £340,005.