Rental yields up to 7.8% in parts of capital city

Edinburgh-based property portal ESPC has revealed the top-performing Edinburgh postcodes in terms of rental yields, for the second quarter of 2024.

The latest rental data from Citylets, combined with the most recent house price information from ESPC, shows that there were four postcodes in Edinburgh that offered the best rental yields for buy-to-let investors during April-June 2024.

Properties in the popular EH3 postcode, spanning the New Town and West End, performed well, with high numbers of professionals especially seeking homes in this iconic part of the city. Offering direct access to the city’s finest amenities and green spaces, alongside beautiful architecture and the likelihood of an easy commute, EH3 has experienced considerable demand from would-be tenants longing to be at the heart of the city’s action. 

One-bedroom properties in EH3 performed especially well, offering an average rental yield of 7.6% during this time, while two-bedroom properties generated a 6.2% yield, and three-bedroom homes produced an average yield of 6.3%.

Homes in the EH8 district were also strong performers during 2024’s second quarter, with properties here in high demand across a range of renters. 

Covering areas including Meadowbank, Willowbrae, Abbeyhill, Holyrood and stretching into Newington and the Old Town, EH8 offers a broad range of properties to suit renters from students and young professionals to families, in areas incredibly close to the city centre and excellent local amenities. One-bedroom properties, once again, were especially popular, generating an average rental yield of 7.1%, while two-bed homes offered a healthy yield of 6.5%. Ideal for families or students, three-bedroom homes were also in high demand, with an average yield of 6.8% for this property type.

The postcode area of EH11 offered very healthy rental yields across the board during the second quarter of this year, likely due to the combination of lower average property prices and increasing renter demand. West of the city centre, EH11 includes up-and-coming areas such as Gorgie, Dalry and Polwarth, alongside the established and sought-after neighbourhoods of Shandon and Slateford, meaning this postcode appeals to everyone from students and young professionals to families. In this postcode, one-bedroom and two-bedroom properties offered rental yields of 6.4% and 6.3% respectively, however, three-bedroom properties performed exceptionally well, with a yield of 7.8% - the best to be found in Edinburgh during this period.

Homes in the EH12 postcode also performed strongly during the second quarter of 2024, with properties here proving popular with a range of renters. 

Located to the west of the city centre, and covering neighbourhoods such as Corstorphine, Murrayfield and Saughtonhall, this postcode offers a variety of homes suited to students, young professionals, and families, plus it provides excellent local amenities and first-rate transport links. In this postcode, one-bedroom properties had an average rental yield of 6.1%, while two-bedroom properties performed especially well, producing a yield of 6.6% on average. Three-bedroom properties generated an average yield of 6.3%. 

Nicky Lloyd, head of ESPC lettings, says: “The second quarter of 2024 was always going to be an interesting time for the rental market in Edinburgh, given that it encompasses the period where the rental legislations in place since 2022 were finally lifted, making an impact on the wider market. We’ve seen rental rates rise at a healthier pace with the new restrictions in place, and the time to let was slower overall, allowing tenants more opportunities to secure their next home. Of course, as we would expect to see in a city like Edinburgh, the rental market continues to be under incredible demand, for properties of all sizes in a variety of areas, with tenants across the market all searching for their ideal place to call home. 

“One-bedroom and three-bedroom properties performed especially well across the board during this period, hinting at high demand from the student population alongside increasing demand from both young professionals and family tenants too. Despite the headlines, the current market certainly offers promising prospects for would-be landlords thinking of entering the sector and providing much-needed housing across the city.”