The side hustle has grown up. What started as eBay flipping and weekend consulting has evolved into something more substantial for many Londoners. Property investment sits at the top of that list. And increasingly, the smart money is heading north.
Compare My Move found a 28.7% rise in Londoners relocating to Scotland last year. But plenty more are buying without moving. They are building rental portfolios in Edinburgh, Glasgow and Aberdeen while keeping their London jobs and London lives.
The appeal is straightforward. Try buying an investment property in London on a normal salary. The sums rarely stack up. Rental yields in the capital hover around 3%. After mortgage payments, maintenance and voids, the monthly profit disappears.
Scotland offers different arithmetic. Glasgow delivers average yields of 6.73%. Edinburgh ranges between 4% and 6%. Aberdeen sits around 5.5%. These numbers work for someone building passive income alongside their day job.
The entry point problem
London has priced out most first-time investors. The average property costs over £700,000. Even a modest flat in Zone 4 demands a six-figure deposit for a buy-to-let mortgage.
Edinburgh averages £292,000. Glasgow comes in lower. Aberdeen lower still. A two-bedroom flat in a decent Glasgow neighbourhood might cost £150,000. The deposit requirement drops dramatically. The monthly cashflow turns positive much faster.
Running the numbers
Take a £150,000 Glasgow flat. A 25% deposit means £37,500 down. Rental income around £900 per month. Mortgage payments on £112,500 at current rates eat perhaps £500. Factor in maintenance, insurance, management fees and void allowance. The monthly profit might land around £150 to £200.
Not retirement money. But repeat that across three properties and the picture changes. £500 per month in passive income covers bills. It builds equity. It compounds over time.
The same £37,500 in London buys nothing. Literally nothing. You cannot get started.
New rules are coming
Anyone building a Scottish portfolio needs to understand the regulatory direction. From 2028, new tenancies require EPC Band C or better. By 2033, every rental must meet that standard.
Roughly half of Scottish rentals currently fall short. Older tenements in Edinburgh, Glasgow and Aberdeen will need upgrades. Windows and doors are the big ticket items.
Scottish weather punishes poor building fabric. Edinburgh gets wind that cuts through gaps in old frames. Glasgow sees rain that finds every weakness. Aberdeen winters drop well below freezing for weeks at a time. A property with draughty windows and ill-fitting doors becomes miserable to live in. Tenants leave. Or they stay and complain constantly.
Energy-efficient glazing and properly sealed doors transform these older flats. Heating bills drop. Comfort improves. The EPC rating jumps. Tenants notice the difference and stick around longer.
Budget for this work. A property with original single glazing looks cheap until you price the replacement. Expect to spend several thousand on quality windows that suit the building’s character. Get it done properly though and you tick the regulatory box while improving tenant retention. Fewer voids mean better returns.
Scottish property has quirks
The building stock differs from London. Edinburgh has Georgian sandstone. Glasgow went Victorian. Aberdeen built from granite.
Factoring arrangements catch people out. Many Scottish flats have shared maintenance obligations. Costs appear without warning. A new roof gets approved and suddenly everyone owes £3,000. Ask about factoring history before buying.
Tenancy law operates differently north of the border. Rent controls have applied at various points. Learn the system or pay someone who knows it.
Managing from distance
Running a rental portfolio from 400 miles away requires systems. Most London-based investors use letting agents. Expect fees around 10% to 15% of rental income.
The alternative is self-management with occasional visits. Flights from London City to Edinburgh or Glasgow take under an hour.
Technology helps. Online rent collection, digital inventories, smart locks. A Glasgow flat can run almost hands-off with the right setup.
The bigger picture
Hybrid working unlocked this strategy. Now plenty of investors could relocate entirely if they chose to. That optionality has value.
Buy a flat in Edinburgh today and it works as an investment. In five years, maybe it becomes a home. The flexibility appeals to people planning career changes or early retirement.
Savills found the £500,000 to £750,000 bracket grew 30% last year. Serious capital is flowing north.
Getting started
Start with research. Understand which neighbourhoods let well. Glasgow’s West End differs from the East End. Edinburgh’s New Town differs from Leith.
Build relationships with Scottish mortgage brokers and solicitors. The buying process differs from England. Home reports exist. Find professionals who can guide you through.
Visit before buying. Photos lie. Spend a weekend walking neighbourhoods and viewing properties.
Scottish property rewards investors who do the homework. The yields work. The entry points remain accessible. For anyone serious about building passive income, it deserves a look.
