Rental income in relation to property cost is the normal basis for buy to let property investment, and this can vary hugely from area to area.
Lettings management platform, Howsy, has revealed the most appealing markets for UK landlords based on the annual rental income return available as a percentage of the property investment cost.
They looked at the average annual rent in every area of the UK and what it equates to as a percentage of the cost of a property to find the areas that provide a better than average rental come return as a proportion of overall house price.
Across the UK the current annual rent of £11,436 accounts for 4.9 per cent of the average UK house price (£234,370).
But where in the UK sits way above this national average?
Scotland seems to be the place to invest for landlords, with 18 out of the top 20 areas with the highest annual rental income as a proportion of house price located north of the border.
Glasgow tops the table with the annual rental income of £10,596 accounting for a huge 7.7 per cent of the average house price, closely followed by Inverclyde (7.1 per cent), Midlothian (6.9 per cent) and West Dunbartonshire (6.9 per cent).
Burnley is the highest outside of Scotland and across England at 6.5 per cent, with Belfast ranking 10th (6.2 per cent), while County Durham and Blackpool place 17th and 18th (5.7 per cent).
Founder and CEO of Howsy, Calum Brannan, commented: ‘There are a whole host of costs to account for when investing in a buy-to-let property but the most important is, of course, the rental income available.
‘However, high rental income doesn’t necessarily mean an area offers the best investment option and if it requires a high initial cost to buy the property, you could be recouping that investment for longer than you might in other areas with a lower rental income.
‘It’s about finding that balance and areas such as Glasgow not only offer a relatively affordable property cost to begin with, but the rental income available as a proportion of house price is far higher than anywhere else in the UK.’
Source: Residential Landlord