Landlords looking outside of London for the best yields

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Landlords looking outside of London for the best yields

Latest industry research suggests that buy-to-let landlords are looking away from London and towards the regions, in order to find the best rental yields.

Provincial cities with notoriously large populations of university students within the North and the Midlands have been named in the top-ten UK buy-to-let hotspots.

Just three London boroughs- namely Southwark, Newham and Tower Hamlets- made it into the top 20.

Location, Location, Location

It appears that a number of landlords are being thoughtful about location before deciding the go ahead and purchase an investment property. Many are conscious of the fact that its value will appreciate at a greater rate than mortgage borrowing.

Significantly-higher property prices in some regions of the capital appear to be putting off some landlords from purchasing property, with the knowledge that they could get better returns elsewhere.

Liverpool was recently named as the top-region for buy-to-let, with average annual rent achieved here £12,252. The average property price here is £122,283, and the typical mortgage cost £2,421. This means that the net rental yield before tax is 8%.

In addition, the Midlands could also prove attractive to would-be investors, with yields of 5.6% and 5.4% in Nottingham and Coventry respectively.

Greater Manchester is seeing average rental yields of 4.3%, while Portsmouth offers 4.2%.

London however offers rental yields of just over 3%, with savvy investors looking outside of the capital.