Buying for Investment in the Scottish Borders

Buying for Investment Purposes in the Scottish Borders

Ron Hastings on the current market for investors – July 2025 update

If you’re looking at property as an investment, you should be thinking about two things:
1. The income return (rental income)
2. Capital growth (what it might be worth when you come to sell)

Capital growth takes time, but there’s still plenty of scope to get a good rental return while the market builds. Prices in the Borders remain competitive compared to the central belt, and buyer confidence has picked up again, with mortgage options more accessible than they’ve been in recent years. That combination gives investors a window of opportunity — but to get the best return, you need to buy smart.

That means:

• Buy at the right price

• Choose something others will want to buy when the time comes

• Focus on tenant appeal, not your personal taste

What kind of properties offer the best return?

It varies depending on your budget and the type of return you’re after, but as a rule:

• Two- and three-bedroom properties are a good middle ground — they appeal to the widest group of tenants and future buyers.

• Ex-local authority flats and houses still offer value. These were hit hard when first-time buyer activity dropped and lenders raised deposit requirements, but that created bargains for investors willing to do a bit of work.

• A low-cost property needing minor improvements might easily return 5%+ gross yield.

• A refurbished or ‘walk-in condition’ 2–3 bed home can still be picked up under the LBTT threshold of £145,000— but do factor in the Additional Dwelling Supplement (ADS) if this is a second property.

⚠️ Note: From 5 December 2024, the ADS rate is 8% of the total purchase price for all second properties over £40,000.

Where to buy – town or country?

Most tenants look for access to shops, schools, and transport — so properties in town or on the edge of town tend to let quicker.

That said, not everyone’s tied to a school run. Some tenants are looking for exactly what the Borders offers: peace, space, and fresh air. A well-presented country cottage with some wow factor might take a little longer to find the right person — but when it does, it can let at a premium.

The rental market has changed a lot in recent years. It’s not just young renters or social housing anymore. Your next tenant might be a family relocating for work, a professional couple testing the area before buying, or someone who’s just sold and needs a base while they look for the right home.

Which areas are worth considering?

There’s good potential across much of the region, but certain towns and villages stand out.

Hotspots:

• Kelso and Melrose – high demand and solid long-term appeal

• Selkirk, Coldstream, Duns, and Jedburgh – strong value, good local amenities

• Galashiels – popular with renters, helped by nearby Borders Railway at Tweedbank

• Lauder, St Boswells, Earlston – all within commuting distance of Edinburgh

Villages with family and tenant appeal:

• Denholm, Ancrum, Swinton, Gavinton – attractive settings and steady interest

Final Thoughts

Smart investors should be looking now — while there’s still choice and before prices move further. A property that’s been on the market a while isn’t necessarily a bad buy — it may just need a fresh pair of eyes. As Bob Dylan put it: “The times they are a-changin’.”

FAQs – Buying an Investment Property

Q: Will I need to pay Additional Dwelling Supplement (ADS)?
Yes. If you’re buying an additional property (like a buy-to-let or second home), ADS applies at 8% of the total purchase price on properties over £40,000. This is on top of standard Land and Buildings Transaction Tax (LBTT). The 8% rate applies to contracts signed from 5 December 2024 onwards.

Q: What sort of rental return can I expect?
A straightforward property in a decent location can return 4–6% gross, and more if there’s scope to add value. You also benefit from long-term capital growth.

Q: Can I buy with a mortgage?
Yes — buy-to-let mortgages are available, but usually need a 25% deposit and proof that the rent will cover the loan with a margin. It’s best to speak to a broker early.

Q: Can Hastings help with letting and management?
Yes — we offer:

• Tenant Finding Only – for landlords who want to self-manage

• Fully Managed Service – for hands-off investing
  We also handle all the legal side through Hastings Legal.

Q: Is now a good time to invest?
Yes. Mortgage lending has improved, property prices are still attractive, and rental demand remains strong across the Borders. That balance won’t last forever.

Interested in Investing?

Call  Hastings on 01573 225999

Hastings Property Portfolio services include buying, selling, tenant-finding and checking, property management and all your property legals.Hastings Legal Lab

Hastings offer both a Fully Managed Letting service where we take care of all the details as well as a Tenant Finding service for those who prefer to manage their property portfolio themselves – See this page for details

If you are interested in looking at investment properties in the Scottish Borders contact Ron Hastings at Hastings Legal on 01573-225999 or see our full range of properties for sale here