Dundee poised to become Scotland’s buy-to-let capital as city investment pays off
The city is attracting record levels of interest from property investors, according to analysis by legal firm Gilson Gray, buoyed by the regeneration of Dundee’s waterfront, the proposed development of the Eden Project and the arrival of a major new e-sports arena as a focal point for its burgeoning gaming industry.
The firm found that the City of Discovery had registered the highest increase in rents during the past 12 months. Across all sizes of property, Dundee saw the strongest year-on-year increase in rents, at an average of 16.9 per cent. Edinburgh was just behind at 16.5 per cent, while Glasgow and Aberdeen saw increases of 15.6 per cent and 7.8 per cent, respectively. During the second quarter of 2023, Dundee saw the highest or joint highest year-on-year rent increases across one, two, and three-bedroom properties alongside the highest average for all sizes of property.
Experts noted that demand for rental property in Dundee had been boosted in recent years by its two universities - as well as overspill from St Andrews university - the city’s life sciences and biotech sectors growing around Ninewells hospital and medical school, and its well established gaming and technology business community.
Marcus Di Rollo, lettings director at Gilson Gray, which was founded in 2014, said: “Dundee is going through a major transformation - there are a lot of positive moves being made and they are changing perceptions of the city. Major infrastructure projects, a growing local economy and a large student population are making Dundee stand out as a great opportunity. All of this is filtering through to the property market and we can see that in this year’s rental figures.
“In comparison to other Scottish cities, the barrier to entry in Dundee is relatively low. You can invest in a portfolio of properties - perhaps as many as five or six - for the cost of one equivalent flat or house in Edinburgh and the yield can be as much as 10 per cent. Some landlords are also choosing to move their investments to Tayside on the back of policy changes, such as licensing for short-term lets.”
The firm’s analysis of figures from Citylets shows that over five years, only Glasgow has had stronger average rental growth, with 53.9 per cent compared to 53.6 per cent in Dundee. However, over ten years, both Glasgow and Edinburgh have seen substantially higher rental increases - 67.2 per cent in Dundee compared to 88.5 per cent and 95.5 per cent for Edinburgh and Glasgow, respectively.
Di Rollo added: “While long-term capital growth may not be as strong as other cities, we do expect property in Dundee to be competitive. Our team in Dundee is now responsible for around 160 rental properties across the city, and we have seen landlords increasingly keen to invest in the city. We only see that interest growing over the next few years.”
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