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Nottingham tops table of UK’s best buy-to-let locations

A survey of more than 580,000 properties across England, Scotland, and Wales by TotallyMoney, which ranked postcodes in order of highest buy-to-let yields, to lowest, found that locations with a high student population, like Nottingham, Liverpool, Manchester, Leeds, and the North East, offer some of the UK’s highest rental yields.

Properties in Nottingham, which has a student population of over 37,000, appears to offer particularly good returns, with two postcodes featuring in the top five.

NG1 takes first place with an average rental yield of 11.99 per cent, and NG7 takes fifth place with an average yield of 8.89 per cent.

Property prices are also affordable, averaging £152,631 and £160,269 respectively – far below the UK average of £226,906.

Liverpool ranks in second place, with two postcodes in the top five, and five postcodes in the top 20. It has an approximate student population of 70,000, as well as three universities, which is thought to contribute highly to its strong yields.

Postcode L7 takes second place and has average rental yields of 9.79 per cent. L1 also performs well, taking fifth place, with average yields of 9.33 per cent.

Newcastle’s NE6 takes sixth place, with an average rental yield of 8.43 per cent.

Property prices here are far below the UK average at £118,789, with Newcastle and Northumbria universities approximately 30 minutes away on public transport.

Similarly, Newcastle’s NE1 has yields of 8.16 per cent, and is within walking distance to both universities. Property prices, however, are slightly higher at £161,035, but are still below the UK average.

In stark contrast, London struggled to perform well compared with its UK counterparts.

TotallyMoney’s head of brand and marketing communications, Mark Moloney, said: “With students flocking to university cities year after year and looking for a place to live, it’s no surprise the student market is a dependable one for landlords.

“Since so many students are looking for accommodation, landlords may use this as an opportunity to drum up competition between them.

“But, due to the tenant fee ban, changes in mortgage tax relief, and tighter buy-to-let lending criteria, rental profits are now being squeezed more than ever.

“To maximise their returns, landlords need to be savvier — and that’s where our map and mortgage comparison tool can help.”

Source: Simple Landlords Insurance

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Southend Tops Buy To Let Property Investment Table

Southend tops the buy to let property investment market for rental yields according to recent research.

New analysis from Private Finance reveals Southend-on-Sea is the UK’s number one buy to let hotspot for investment, offering average rental yields of 6.6 per cent once mortgage costs are taken into account.

The analysis – which calculates rental yields in the 50 UK towns and cities with the highest proportion of private rental housing stock – highlights that house prices and mortgage costs can be just as influential as rental income when assessing the best locations to invest.

An annual rental income of £23,280 means that landlords in Southend enjoy a lucrative return for a relatively small upfront investment, with house prices in the area only slightly higher than the national average (£279,358 against £231,000).

Four out of 10 areas with the highest rental yields feature in the top ten buy to let hotspots – Westminster, Camden, Tower Hamlets and Southend-on-Sea – but an equal number of areas with the lowest house prices also feature in the top ten list.

Liverpool, Nottingham, Greater Manchester and Coventry all feature in the top 10 and benefit from some of the lowest house prices in the UK, suggesting potential buy to let property investors should not only consider potential rental income when assessing where to invest.

This is also encouraging news for buy to let property investors with smaller sums to invest, demonstrating you don’t need to spend millions to secure a lucrative property investment.

Director at Private Finance, Shaun Church, commented: Southend is a popular spot for renters, with all the benefits of living in a popular seaside town less than an hour’s commute from Central London, and with good airport connections.’

He continued: ‘With the high cost of renting pricing many out of the city, towns in a commutable distance from London that offer a more relaxed lifestyle at an affordable price are becoming increasingly popular among young professionals. Rental demand is likely to grow in these pockets outside of London, offering good opportunities for buy to let investors.’

Top Ten Buy to Let Hotspots by Average Net Rental Yield

Location Percentage of Privately Rented Housing Stock Average house price (July 18) Average house price (July 17) Mortgage costs (interest-only) Average Rent 2018 (Monthly) Average Rent 2018 (Annual) Net Rental Yield Aug 2018
Southend-on-Sea 20.72% £279,358 £272,873 £4,840 £1,940 £23,280 6.6%
Nottingham 21.64% £137,835 £134,019 £2,388 £928 £11,136 6.4%
Westminster 37.56% £970,990 £1,058,953 £16,822 £5,554 £66,648 5.1%
Edinburgh 20.48% £254,170 £239,016 £4,403 £1,410 £16,920 4.9%
Greater Manchester 26.85% £167,928 £160,001 £2,909 £911 £10,932 4.8%
Liverpool 21.75% £136,521 £127,060 £2,365 £725 £8,700 4.6%
Tower Hamlets 30.84% £473,327 £449,170 £8,200 £2,447 £29,364 4.5%
Camden 30.46% £810,708 £865,076 £14,046 £4,178 £50,136 4.5%
Coventry 19.02% £185,990 £175,375 £3,222 £952 £11,424 4.4%
Southampton 23.42% £212,155 £205,687 £3,676 £1,045 £12,540 4.2%

Source: Residential Landlord