Thursday, 16 June 2016

Penicuik or Dalkeith for a Buy to Let investment. Which is the best?

A landlord of mine phoned me up the other day to say that he was thinking of buying a buy to let property in Penicuik or Dalkeith and wondered if I had an opinion.  Yup, I have an opinon, one based in fact.

I explained to my landlord that Penicuik and Dalkeith towns – their population is fairly similar (Penicuik’s population is slightly bigger at 15,926 compared to Dalkeith’s 12,342), they both have local employment (for example Dalkeith is the administrative centre Midlothian Council and Penicuik is near the Roslin Institute and the like) and they both provide a good place to live for people who are working in Edinburgh but either want more space/a garden or can’t afford Edinburgh housing costs. 
The average price of a property in Dalkeith is higher at £186,421 compared to Penicuik’s £172,946.  However, this is skewed by detached and, to a lesser extent, semi detached houses which generally make less attractive buy to let properties given that they generally give lower returns:

·         The average price of a detached and a semi detached house in Dalkeith is £330,353 and £198,687 respectively whereas in Penicuik it is £300, 859 and £185,669 respectively.
·         The average price of a terraced house and a flat in Dalkeith (£139,834 and £121,906) respectively are very similar to Penicuik (£138,607 and £120,517 respectively).

Price increases over recent years in Penicuik and Dalkeith for proerties that would make good buy to let investments have also been fairly similar averaging about 3% per annum over the last 5 years.

So prices are fairly similar in Dalkeith and Penicuik for properties that are likely to make good buy to let purchases.

According to rental statistics provided by The Key Place, Scotland’s premier letting agency, average rents are slightly higher in Penicuik (£690) compared to in Dalkeith (£678).

So the rental yields are likely to be higher in Penicuik.

Finally, turning to number of properties on the market.  The basics of supply and demand dictate that price increases when something is in short supply and vice versa.  The rental statistics provided by The Key Place show that over the last year there have been more rental properties on the market in Dalkeith (14 on average at any one time) than in Penicuik (9 on average at any one time).  And in addition these rental statistics show that on average over 50% of the Dalkeith properties for rent were 2 bed properties whereas this was only 33% in Penicuik.

So supply in higher in Dalkeith especially for 2 bed properties. 

On balance, I suggested to my landlord that he look in Penicuik for his next buy to let investment as, whilst Dalkeith and Penicuik are fairly similar as we their property prices, the rental yields are likely to be higher in Penicuik.  I also suggested strongly that if he was going to buy in Dalkeith that he avoids 2 bed properties as there seem to be a fair few of them around ..... some would say too many!

If you would like to pick my brains about buying for investment purposes, pop into my office at 6 Bank Street, Penicuik for a chat, give me a call 01968 674601 or email me  on

A few more interesting articles about the Penicuik Property Market:

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