According to new research from Keepmoat, Brandon is the most profitable destination for retirees looking to invest their pension funds in buy-to-let property. The average yield in the charming Suffolk town is an impressive 8.59%
Keepmoat, a national market leader in community regeneration, worked out the most profitable areas for pensioners by using government data which suggests that the average defined contribution pot for a 55-year old is £35,000.
Other than Brandon, Scottish towns dominated the top five, while towns in Wales also performed well. The low house prices in Wales means strong rental yields can be achieved for a small deposit. Rutherglen, South Lanarkshire (7.92%), Cambernauld, North Lanarkshire (7.83%), Renfrew, Renfrewshire (7.50%) and Grangemouth, East Stirlingshire (7.45%) made up the top five, while Tonpandy (7.2%) and Trealaw (6.77%) in South Wales also made the top 20.
The highest regional returns, though, can be found in the East of England. Property here achieves an average yield of 5.24%.
Meanwhile, the most affordable locations for buy-to-let pension investors are the North West and Yorkshire & The Humber. By contrast, nowhere in London had an average house value below £212,000 and only two towns in the whole of the South East were eligible for Keepmoat’s research, showing just how much prices have risen in this region in the last decade or so.
Mark Knight, Regional Managing Director for Keepmoat, commented on the findings. “This is a really diverse list of locations and it shows that even if you only have a limited amount to spend you can make a great investment in buy-to-let property,” he said. “All the locations in our top 20 have a potential average rental yield of over 6% and some offer an average house price of less than £70,000.”
He added: “Many first-time investors buy close to where they live, which makes a lot of sense as they obviously know the area. But, if the rental demand is not there, then you should look further afield; don’t be afraid of following the demand, wherever that is in the country.”