Areas of Aberdeen: Buy-to-Let Property Investment Hotspots
Aberdeen has long been known as the Granite City... and in recent years as Europe’s oil capital. Here we’ll look at how the Granite City stacks up as a place to invest in bricks and mortar.
Why Invest in Aberdeen?
Aberdeen is located in the Aberdeenshire area of north-east Scotland. Aberdeen is Scotland’s third-largest city after Glasgow and Edinburgh and has a population of around 229,000.
Aberdeen is a fast-growing city. Aberdeen City Council forecast the Aberdeen population could be around 268,000 by 2038.
Aberdeen is known as the Granite City or Silver City due to the large number of buildings built from this type of stone.
The city is also known as Europe’s oil capital – no other city in Europe has a bigger oil industry. While the oil is extracted out in the North Sea oil fields offshore the associated support and supply industries are located mostly in and around Aberdeen.
Aberdeen is now being developed as an energy capital, however, rather than just an oil capital. The aim is to help create a modern, net-zero economy for the city once the oil industry declines. Major projects in the city include the Energy Transition Zone and the Aberdeen Hydrogen Hub. Research science and life sciences are other, new, high tech., high-value industries in Aberdeen.
Aberdeen is the major service centre for this part of Scotland and also supports the Orkney Islands and the Shetland Islands. Other local employers include services, public services, health, education, retail, fisheries, food and drink and agriculture. Aberdeen Royal Infirmary at Foresterhill is the region’s largest hospital.
The workers of Aberdeen are often considered to be amongst the wealthiest in the UK –even wealthier than those in London – thanks to high incomes offered by the oil industry and lower living costs. Aberdeen typically has the lowest unemployment rate in Scotland. Both of these things help to support the property market and create more demand for homes to buy and homes to rent here.
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Aberdeen is ringed by many business parks which provide thousands of jobs. These include Aberdeen International Business Park, ABZ Park, Badentoy Industrial Estate and Aberdeen Energy and Innovation Parks amongst others. Many national and international companies in the oil and associated industries have offices in Aberdeen.
Aberdeen is connected to the rest of Scotland by the A90, A92 and A96 main roads. Aberdeen train station has services to destinations including Inverurie, Montrose, Dundee, Inverness, Glasgow and Edinburgh and has several direct trains each day to London King’s Cross. Aberdeen Airport has UK-based and international services. Aberdeen Airport also supports the oil industry and is the busiest heliport for movements in Europe. Aberdeen Ferry Terminal has ferry services to Kirkwall and Lerwick.
Aberdeen is likely to become a much bigger city in future. There are large new town developments underway including Grandhome, Countesswells and further south at Chapelton where there could eventually be up to 8,000 new homes.
Aberdeen also has a large student population, so there’s a student accommodation market in the city too. The University of Aberdeen has around 15,000 students and Robert Gordon University (RGU) has around 16,700 students.
Property Values in Aberdeen
The average price of a property in Scotland is currently around £162,000 according to HM Land Registry figures. Property prices in Aberdeen itself are currently lower than the Scotland average. The average price of a house in the City of Aberdeen is £142,631.
House prices in the surrounding area are more expensive than in Aberdeen itself, however. HM Land Registry report that the average house price in Aberdeenshire is currently £183,687.
Property portals Zoopla and Rightmove show that you can buy property in Aberdeen starting from around £40,000.
It’s often said the Aberdeen economy and Aberdeen property prices are linked to the fortunes of the oil industry and the oil price. In times when the industry is expanding and oil prices are high demand for property rises and Aberdeen prices rise. In times when the industry is contracting and oil prices are low demand for Aberdeen property falls and prices stay static or fall.
Now could be a good time to find property bargains in Aberdeen, however. This recent report says that while property prices have risen across Scotland by 8.1% on average over the last year in Aberdeen prices fell by 2.1%.
Rental Demand in Aberdeen
Aberdeen offers investors a wide range of different investment opportunities. As well as the local market there is demand from those coming to work in Aberdeen, expatriates from abroad and contract workers in the oil industry. There is also demand from the student accommodation market. Aberdeen investors might also look at the short term and serviced accommodation market too.
According to Home.co.uk’s Aberdeen Market Rent Summary, the average monthly rent in Aberdeen is currently £624. The figures show that average rents for different types of Aberdeen buy to let property are £452 PCM for a one-bed property, £620 PCM for a two-bed property, £924 PCM for a three-bed property, £1,316 PCM for a four-bed property while a five-bed property could rent at £1,811 monthly.
Aberdeen can offer good rental yields for investors. Aberdeen itself is covered by the Aberdeen AB10, AB11, AB12, AB13, AB14, AB15, AB16, AB21, AB22, AB23, AB24 and AB25 postcodes. Property.xyz's figures report that investors can find average gross yields of up to around 7.4% in Aberdeen.
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When investing in property in Scotland it’s important to know that the system of buying property is different to elsewhere in the UK. The Money Advice Service describes exactly how buying property in Scotland works. Scotland’s stamp duty, Land and Buildings Transaction Tax (LBTT), is different too. This Scottish Government site gives the latest rates for Land and Buildings Transaction Tax.
Aberdeen, like the rest of Scotland, has a landlord registration scheme. Landlords need to register and laws applying to tenancies are different from England and Wales. For more information, you can look at the Scottish Landlord Register.
Investment in Aberdeen
Average House Price: £142,631
Aberdeen offers property buyers and investors a very wide range of properties from old often granite built property to contemporary new builds. Property types include modern apartments, traditional tenements, terraces and cottages to bungalows and semi-detached and detached houses of all sizes.
Investors in Aberdeen property might bear in mind that Aberdeen is a busy city and can be congested. So tenants tend to favour areas where their commuting time to work or travel time to schools, is reasonable.
Aberdeen city centre has a city living property scene and has good access to the city amenities, although access is not quite so good to workplaces on the edge of the city. Property types here mainly include flats in traditional tenements, terraces and new-build blocks. The West End, just outside the city centre, is a sought after residential district with larger properties and its own shops, pubs, restaurants and other amenities.
North Aberdeen districts include Donside, Hayton, Hilton, Kittybrewster, Old Aberdeen, Tillydrone and Woodside. The University of Aberdeen is to the north of the city centre at Old Aberdeen.
Further out across the River Don are Cloverhill, Danestone, Middleton Park and Bridge of Don. These areas are well located for the employment sites at Bridge of Don Industrial Estate and Aberdeen Energy and Innovation Parks. Bridge of Don has its own local schools and amenities and is a very popular residential area for Aberdeen commuters.
To the north-east of Aberdeen is the small town of Dyce plus Banksburn and Bucksburn. Aberdeen Airport is at Dyce and there are also a number of large employers, particularly those connected to the oil industry, at locations such as Kirkhill Industrial Estate.
West Aberdeen locations include Cummings Park, Mastrick, Northfield and Sheddocksley. Aberdeen Royal Infirmary and Woodend Hospital are on this side of the city. Further out are the villages of Fairley and Kingswells and, across the A90, Westhill which is a growing residential and commercial area.
South Aberdeen districts include north of the River Dee, Bieldside, Braeside, Bridge of Dee, Broomhill, Craigiebuckler, Cults, Garthdee, Hazlehead, Mannofield, Milltimber, Rubislaw and Ruthrieston. Ruthrieston and Broomhill are popular, mid-market suburban area that is also well located for city access. Bridge of Dee and Garthdee are popular residential areas and also appeal to students at Robert Gordons University.
Bieldside, Milltimber and Cults are amongst Aberdeen’s most favourite areas for buyers and tenants, with mainly larger houses that particularly appeal to families. Property prices in these areas are well above the Aberdeen average, however. Further out the large village of Peterculter is also sought after. These areas have recently become even more popular as the new A90 Aberdeen Western Peripheral Route which passes close by means they have good access to many parts of the city and wider area.
The south of the River Dee areas include Altens, Balnagask, Cove Bay, Ferryhill, Kincorth, Nigg and Torry. These areas are well situated for access to the business and industrial parks including Altens Industrial Estate, East Tullos Industrial Estate, West Tullos Industrial Estate and Gateway Business Park. Cove Bay is close to employment areas yet popular due to its villagey atmosphere.
Investors who are considering investing in Aberdeen might also consider the small towns and villages away from the city in the wider Aberdeenshire area. These areas are very popular residential areas with those who work in Aberdeen but prefer to live in a more rural area. Stonehaven and Portlethen on the coast have their own train stations with services into Aberdeen and further afield.