DECEMBER 03, 2018 | BY A & S Property
UK’s highest yields: the best postcodes for buy-to-let
Landlords currently looking for the UK’s best buy-to-let areas should consider locations with a high student population, with yields of up to 12% still achievable if you know where to look, according to new research.
A fresh survey by TotallyMoney provides both an interesting insight into the market and a useful tool for buy-to-let landlords, revealing that university cities offer some of the highest buy-to-let yields, making them potentially the most lucrative hotspots for landlords.
The research, which analysed more than 580,000 properties across England, Scotland, and Wales to rank 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%, and NG7 takes fifth place with an average yield of 8.89%.
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%. L1 also performs well, taking fifth place, with average yields of 9.33%.
Newcastle’s NE6 takes sixth place, with an average rental yield of 8.43%. 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%, 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.
North London in particular was a poor performer, with five postcodes in the bottom 10. Highgate in N6 was the worst postcode in the capital and third from bottom overall, with paltry yields of just 1.93%.
TotallyMoney’s head of brand & 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.”
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