The Motley Fool
Published Apr 08, 2019 13:07
Updated Apr 08, 2019 13:36
Buy-to-let mortgage demand may be falling through the floor but it doesn’t mean that rental yields have suddenly gone up in smoke. In fact, recent evidence suggest that the UK’s major cities still offer up some pretty compelling numbers.
A recent report from Benham & Reeves showed that investors in Liverpool can enjoy monster double-digit rental yields. More specifically, those purchasing property to let in the L7 and L6 postcodes can soak up yields of 10.7% and 10.4% respectively.
Meanwhile, the L5 postcode which covers the northern part of the City boasts a chubby rental yield of 9.4%.
It’s great up North What the sales and letting agent’s research also showed was that the big yields in the Scouse city aren’t an anomaly. The Middlesbrough postal code of TS1 also offers rental yields above 10%, at 10.2%, a reading also shared by the Greater Manchester postcode of M14.
Interestingly Benham & Reeves’ data showed that the top 10 most lucrative towns for buy-to-let investors are in the north of England, with Bradford, Sunderland, Newcastle-Upon-Tyne, Sheffield and Nottingham locking out the rest of the list.
The figures prompted agency director Marc von Grundherr to comment that “despite the government’s attempts to dampen the appetite of the sector it remains a lucrative business and… there are plenty of buy-to-let honey pots out there that will bring a great return on your investment.”
Top UK Postcodes for Rental Yields | ||
Area | Avg yield | Avg price |
L7 | 10.70% | £105,000 |
L6 | 10.40% | £85,000 |
TS1 | 10.20% | £61,000 |
M14 | 10.20% | £163,000 |
BD1 | 9.90% | £58,000 |
SR1 |
9.70%
Get The App
Join the millions of people who stay on top of global financial markets with Investing.com.
Download Now
|
£68,000 |
L5 | 9.40% | £69,000 |
NE6 | 8.50% | £123,000 |
S2 | 8.50% | £109,000 |
NG7 | 8.50% | £137,000 |
According to Benham & Reeves, the most lucrative postcode in the capital is E6, but this area in Barking still only carries rental yields of 5%. In fact, this little eastern pocket of the city seems to be one of the best destinations for landlords to buy, with the adjacent neighbourhood of Dagenham also in the higher echelons of the yield list.
Top London Postcodes for Rental Yields | ||
Area | Avg yield | Avg price |
E6 | 5.0% | £357,569 |
IG11 | 5.0% | £305,965 |
RM8 | 4.9% | £319,975 |
RM9 | 4.9% | £306,262 |
RM10 | 4.9% | £319,077 |
N18 | 4.8% | £362,996 |
RM13 | 4.8% | £353,392 |
SE28 | 4.8% | £291,233 |
E15 | 4.7% | £426,876 |
EN3 | 4.7% | £355,416 |
So I’d suggest that you forget about buy-to-let and go shopping for some great shares like these instead. I’m not saying that London’s yields are anything close to bad, but they’re clearly put in the shade by those that can be found in Liverpool and those other northern cities. That doesn’t mean I’d consider investing in those prime buy-to-let destinations though. Fresh cost hikes for landlords introduced last week illustrated the mounting pressure on returns, not to mention the increasing complication of operating rental properties, and I expect conditions for proprietors to get tougher and tougher.
us better investors.
Motley Fool UK 2019
Written By: The Motley Fool
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.