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Buy to let hotspots 2018 | UK

Buy to let hotspots 2018 | UK

Buy-to-Let Rental Yields 2017/2018

The recent interest rate rise, on top of the buy-to-let tax changes and lender checks that came into effect earlier in the year, have made it more important than ever to assess the profitability of property investments.

When the Bank of England raised the base rate to 0.5%, they added to the challenge faced by many landlords. Margins are being squeezed, but buy-to-let rental properties can still offer competitive private rental returns if you know where to look. We surveyed 500,000 properties across England, Scotland and Wales to find the areas that offer the highest buy to let yields; the hotspots that offer the best rental revenue you could make as a proportion of the price of the property.

So, whether you’re sizing up your first investment property or a seasoned landlord adding to an existing portfolio, use our map to help unlock the best rental yield.

Hotspot highlights

University cities place strongly on the league table of buy-to-let hotspots. Students are reliable tenants and can give landlords the kind of stable rental income needed to realise a healthy return on their investment.

  • With a student population of 70,000, Liverpool’s popularity as a destination for those in higher education is matched by the opportunities it offers buy-to-let investors. Liverpool postcodes dominate the yield table once again, taking the top three spots.
  • Liverpool’s L7 remains in top spot. The postcode covers City Centre, Edge Hill, Fairfield and Kensington and its proximity to two of Liverpool’s three universities makes it a favourite for student lets.
  • Liverpool postcodes also dominate the top 25 buy-to-let yield table, with 2008’s European Capital of Culture making up eight of the top 25 postcodes.
  • Home to the University of Plymouth, the PL4 postcode soars up the table from 15th to 4th (10.15% yield).
  • Middlesborough’s TS1 postcode is home to Teeside University and makes the top five with an average yield of 10.06% and an average property asking price of £64,500.
  • With four universities and a student population of 100,000, the Manchester rental market is strong. The city boasts two of the highest yields in the study, with 8.25% in the M6 postcode and 7.98% for M14, student favourite and home to the University of Manchester’s Fallowfield Campus.

London and other lows

  • No postcodes from London or the Home Counties make the top 25 BTL yielding postcodes
  • Central London postcodes make up 8/25 of the bottom BTL yielding areas.
  • All postcodes in the 25 lowest yielding areas have an average price of >£300k. And the £2.9m price tag in London’s N2 East Finchley postcode is way over the £223,257 UK average³.

North-South divided

  • Only three postcodes in the bottom 25 are north of the Watford Gap: Huddersfield HD9; Leeds LS18; and Birmingham B15.
  • Covering Canford Cliffs, Sandbanks and Branksome Park, Poole’s BH13 postcode has the lowest BTL yield in the study with just 1.41%.

 

 

 

Data is based on an analysis of 191,229 rental properties and 328,523 properties marketed for sale online on 20 March 2017 (source: www.zoopla.co.uk).

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