Edinburgh’s buy-to-let market has delivered strong returns in early 2025, with new data revealing a marked shift in tenant demand and property performance across the capital.
According to property portal ESPC and rental platform Citylets, three-bedroom homes in several key postcodes are now outpacing smaller flats in terms of average yields, driven by increasing demand from families and a changing rental landscape.
Among the top-performing areas, EH3 — which includes New Town and the West End — remains a magnet for professionals, with its Georgian architecture, green spaces, and proximity to city centre amenities and transport. Here, one-bedroom flats yielded 6.8%, while two- and three-bedroom properties returned 5.6% and 5.4% respectively.
EH6, home to the ever-popular Leith district, also performed well. Three-bedroom homes achieved an average yield of 6.7%, outstripping smaller flats. The recent tram extension and strong local amenities have widened EH6’s appeal, particularly among families.
EH8, spanning Newington, Duddingston, Abbeyhill and Willowbrae, offered near-identical performance, with three-bedroom homes again topping the table at 6.8%. Two-bed properties yielded 6.5%, and one-bed homes returned 6.4%.
In EH11 — covering Gorgie, Dalry and Slateford — a similar trend was observed. Buoyed by lower property prices and strong tenant demand, particularly from students and young families, all property types performed strongly, with three-bed homes again delivering 6.8%.
Meanwhile, EH12, which includes Corstorphine, Murrayfield and Hermiston, stood out for one-bedroom rental yields, averaging 7.1% — the highest return for any property size across all postcodes. Two-bed homes yielded 6.6%, while three-beds dropped to 5.4%, in contrast to the wider trend.
However, the top spot overall went to three-bedroom properties in EH1 — the Old Town and Princes Street — where yields reached a city-leading 7.3%. Despite EH1’s higher property prices, its central location and heritage appeal continue to drive consistent demand.
Nicky Lloyd, Head of ESPC Lettings, said that while buy-to-let activity started slowly in Q1 due to changes in the Additional Dwelling Supplement, easing rent controls and sustained tenant demand are tempting landlords back into the market. “Tenant demand remains strong, particularly for one-bedroom furnished properties,” she said. “But what’s new is the surge in interest for three-bedroom homes — largely due to more families seeking rental homes in desirable Edinburgh locations.”
She added: “There’s been a notable increase in tenants looking for new homes as landlords exit the market, meaning available properties are being snapped up quickly. It’s an increasingly competitive environment.”
The latest figures suggest that landlords looking to invest in Edinburgh would do well to consider family-sized homes in key districts — a shift from the long-held assumption that one- and two-bed flats offer the best returns.
With more properties coming onto the market and rental rules easing, the capital’s buy-to-let market may be heading into a new chapter — one where bigger might just be better.
