Dundee primed to become Scotland’s ‘buy-to-let capital’

Dundee could become Scotland’s “buy-to-let capital” after the cost of renting in the city rose sharply in the past year.

Figures from property letting portal Citylets show the average rent in the city rose by 16.9% from the third quarter of 2022 to the corresponding period this year.

The largest increase was in one-bedroom properties, which rose 18.3% in Dundee.

Of the four cities – Edinburgh, Glasgow, Aberdeen and Dundee – featured in the study, the capital had the next highest rise in one-bedroom rents (16.9%).

Meanwhile a two-bedroom property in Dundee rose by 16.2%, second only to Edinburgh’s 18.4% increase.

There was also a 13% increase in the average rents being charged for three-bedroom properties in Dundee, again second to Glasgow’s 17.4% rise.

Over five years, only Glasgow has had stronger average rental growth, with 53.9%, compared to 53.6% in Dundee.

However, over the past decade both Glasgow and Edinburgh have seen higher rental increases than the city.

Rent has risen 67.2% in Dundee in the past 10 years, compared to 88.5% in Edinburgh and 95.5% in Glasgow.

Dundee ‘changing perceptions’

Dundee law firm Gilson Gray said the city was poised to become Scotland’s “buy to let capital”.

Marcus Di Rollo, lettings director at Gilson Gray, added: “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.

“You can invest in a portfolio of properties for the cost of one equivalent flat or house in Edinburgh. The yield can be as much as 10%.”

He said the Dundee team is now responsible for about 160 rental properties across the city.

He added: “While long-term capital growth may not be as strong as other cities, we do expect property in Dundee to be competitive.

“We have seen landlords increasingly keen to invest in the city.

“We only see that interest growing over the next few years.”