A new kind of North-South divide has opened up in the country’s buy-to-let market as soaring prices make the South unattractive, and investors turn their attention further North.
A recent study put together by Property Partner revealed that out of 100 towns and cities across Britain, the ten best buy-to-let locations are all located in the North while the study’s ten worst areas are all in the South.
Stoke-on-Trent is currently the country’s most lucrative buy-to-let hotspot, featuring the best combination of house prices, local salaries and rental returns, the research revealed.
Greater Manchester’s Oldham comes in as second best for buy-to-let investment followed by Liverpool.
The rest of the study’s top ten is made up of Leeds, Middlesbrough, Newcastle, Stockton-on-Tees, Gateshead, Rotherham and Rochdale.
The worst area to currently put your money as a buy-to-let investor is Poole, where the annual rental yield only averages at 1.94%, followed by Central London and Sevenoaks.
Other member of the ten worst places for buy-to-let investment are Bournemouth, Cambridge, Oxford, Winchester, St Albans, Chelmsford and Brighton.
The study wasn’t purely based on rental yield, but also took factors like average income, average property price and average rent into account. The easiest way to enter the buy-to-let market is to invest in an area where the investor’s income is pretty high compared to the local property prices. They will then earn a better income if those properties ask for high levels of rent compared to their original price.
For those buy-to-let investors looking for a high income, the study paints a very clear picture; there’s a very apparent connection between low rental yield and and inefficient investment.
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In total, five places featured in both, the top ten for best yielding towns and cities and the ten best places to become a landlord. Those are:
- Leeds with a rental yield of 6.92%
- Gateshead with a rental yield of 5.78%
- Stoke-on-Trent with a rental yield of 5.67%
- Rochdale with a rental yield of 5.6%
- Newcastle with a rental yield of 5.59%
So, if the study tells us anything, it’s that when it comes to investment property it’s not always about central location, huge demands and shiny stock, sometimes the perfect spot can be close to your doorstep, with less demand than you expected.
