Online estate agency yieldit has unveiled the best buy-to-let locations in England and Wales.
The new data, gathered from the agency's current available properties, highlights a clear contrast in the regions when it comes to investing in residential buy-to-let, with a 2.5% difference in net yields between the best performing and worst performing regions.
The Midlands came out on top, with average net yields of 6.6%, followed not far behind by Yorkshire, the North East, Wales and the North West, which all commanded net yields of 5.5% or higher. Yorkshire led the pack at 5.7%, with areas such as Bradford and Scarborough performing especially well, producing net yields of more than 6%.
The South East and East of England, by contrast, lagged behind with averages of 4.4% and 4.1% respectively. London was responsible for pulling down the average of the South East, with net yields of only 3.7%.
This trend was bucked by areas like Folkestone in Kent, which had net yields of 5.8%. This is largely thanks to its revival as a coastal commuter hub under an hour from the capital, while the town has also been boosted by considerable investment into its Creative Quarter – now home to a number of successful businesses.
“As always it’s interesting to look at which areas are performing the best in terms of net yields,” Ryan Hughes, head of sales at yieldit, said. “It's no surprise to see the Midlands leading the way with attractive asking prices and rising tenant demand.”
The Midlands as a region is boosted by its biggest city – Birmingham – with recent research showing that in 2017 some 7,260 people swapped London for Birmingham, making it the most popular destination for ex-Londoners in England. Birmingham is also a thriving hotspot for buy-to-let, driven by regeneration, high demand from tenants, more affordable property, strong transport links and improving infrastructure.
“It's clear that high property prices in the south and London have had a negative impact on net yields and as such investors are looking further afield,” Hughes added. “As renters continue to abandon the capital in favour of our regional cities we are seeing landlords follow – a trend that shows no sign of abating any time soon.”