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Coast, country or city – where are the top buy-to-let locations?

The latest research from lettings management platform Howsy has looked at what makes the ideal investment location for UK landlords when it comes to cities, the seaside or market towns in the country.

It analysed 20 of each category to see which offered the best rental yields overall as a category and which were the most lucrative specific investment locations per category.

The overall returns

With the current average UK rental yield returning 3.56%, all three rental locations (coast, country or city) offer above-average yields.

The findings revealed investing in a city generally returns the highest yield, with the top 20 seeing an average return of 5%.

Meanwhile, the countryside is home to the next best investment option, with the top 20 market towns returning an average yield of 3.72%. The top 20 seaside towns were home to an average yield of 3.59%.

Best city rental yield returns

While all of the major cities offer an average yield above the UK average, Glasgow is home to the highest rental yield returns at 7.93%. Belfast comes close behind with an average rental yield at 6.55%.

Nottingham (5.46%), Manchester (5.45%) and Sunderland (5.33%) also rank in the top five.

Best market town rental yield returns

For those interested in investing in a slower pace of life, Bangor is the market town with the highest rental yields on offer at 4.86%.

Dumfries isn’t far behind with an average rental yield of 4.59%, while Morpeth and Alnwick are also home to an average yield of 4.25%.

Nantwich completes the top five market towns with the highest rental yields at 4.12%.

Best seaside town rental yield returns

Although seaside locations aren’t home to yields as strong as the city or the country, investing by the sea still has its perks.

Brighton is home to the best of the bunch with an average rental yield of 4.27%. Tynemouth also ranks high at 4.24%, followed by Bournemouth (4.15%), Crosby (4.08%) and Torquay (3.84%).

Calum Brannan, founder and chief executive officer of Howsy, says: “Cities are typically the preferred place for a buy-to-let landlord when it comes to investing, largely due to the higher level of rental income and the consistent demand for rental homes. So it comes as no surprise that they are home to the highest yields overall.”

“That said, the coast and country can also prove to be very lucrative and as the figures show, there are plenty of options across both that offer yields way above the national average.”

He says the best thing about the buy-to-let market is investments aren’t restricted to one or the other, and the professional landlord can opt to spread their property portfolio across city, seaside and country if they so wish.

“While traditionally geographical distance may have made this tricky, the technological disruption of the buy-to-let sector has changed the way we invest and manage in bricks and mortar. With online and hybrid platforms allowing easy management from your front room, there’s no reason why you can’t invest the length and breadth of the UK,” he concludes.

Below shows the rental yields across each rental type category:

Location

Average House Price 2019

Average Monthly Rent 2019

Rental yield

City

£184,228

£750

5.00%

Countryside (Market Towns)

£238,388

£717

3.72%

Seaside

£238,086

£709

3.59%

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