The best yielding buy to let property investments are the utopia every investor looks for, and research by sales and letting agent Benham and Reeves highlights the best spots.
Being a London agent, Benham and Reeves have obviously included the capital when searching for the best buy to let areas for rental returns, but the north can offer better yielding places.
Top on the list came Liverpool’s L7 postcode. With an average price of just £105,000, the area offers an average rental yield of 10.7 per cent.
This was closely followed by the neighbouring L6 postcode where yields are currently 10.4 per cent. Middlesbrough, Manchester, Bradford, Sunderland, Newcastle, Sheffield and Nottingham were also home to some of the highest yielding postcodes.
When it came to the capital, the agent found the highest yielding postcode to be the E6 postcode in East London, along with IG11, which covers Barking. Both locations offer a rental yield of 5 per cent.
East London dominated the top 10 highest returns for buy to let postcodes, with Romford postcodes RM8, RM9 and RM10 also amongst the best with rental yields of 4.9 per cent.
With E15 and EN3 also in the top ten highest yielding London postcodes, N18, which straddles the North Circular, is one of the only postcodes outside of East London to make the list with a rental yield of 4.8 per cent, while SE28 was the only postcode south of the river to appear.
Unsurprisingly, director of Benham and Reeves, Marc von Grundherr, concentrated on the capital, saying: ‘The DNA of the London rental market is so complex that it pays to consider where to invest on the most granular level possible when looking at the buy to let market.
‘Of course, London’s more prime postcodes are always a safe bet, attracting investment due to their prestigious image and positioning. While we may have seen some decline in price growth due to political uncertainty, they remain very much in demand from a rental point of view and so far, those with the budget to buy there, a return isn’t hard to come by.’
He concluded: “They also offer better capital growth than London’s peripherals and for those not completely dependent on yield but preferring to opt for more long-term growth, inner London is still the go-to place to invest in the capital’s buy to let market.’
Source: Residential Landlord