x
By using this website, you agree to our use of cookies to enhance your experience.

TODAY'S OTHER NEWS

Revealed: the UK’s best and worst places for buy-to-let

Many landlords and investors may now be looking to expand their portfolios, with lockdown restrictions gradually being eased and major lenders such as Barclays, Accord Mortgages and Skipton International cutting rates and raising their lending ceilings.

But where’s the best place in the UK to invest in at the moment?

Mojo Mortgages analysed data from the Land Registry, Zoopla, OnTheMarket and property data portal PropertyData.co.uk to find out where the current hotspots are, and also the areas that don’t generate profitable yields.

Advertisement

There are an estimated 2.6 million buy-to-let landlords in the UK and, despite the pandemic, Mojo Mortgages says those who do have the funds to invest believe investment opportunities will emerge, with lenders cutting rates on buy-to-let products and raising affordability thresholds.

The free online mortgage broker also says there’s market sentiment which is leaning towards limiting competition from other buyers and even pushing up demand for rental property.

The top 20 buy-to-let areas – where are they?

Postcodes in the top 20 are all generating some good returns, with the highest being Liverpool, where landlords can enjoy yields of up to 10%. Bradford, Sunderland and Middlesbrough follow with yields of 10, 9 and 8% respectively.

Liverpool and Sunderland are popular university cities and the consistent flow of potential tenants puts landlords in a good position, even if this might now be temporarily disrupted by universities operating remotely for the foreseeable.

Even postcodes towards the bottom of the top 20, such as those in Aberdeen and Glasgow, are returning healthy yields of 7%.

Postcode

Town

Region

Properties for rent

Average yield

Properties for sale

Average price

L7

Liverpool

North West

98

10.30%

59

£95,000

BD1

Bradford

North West

89

10.00%

63

£57,000

SR1

Sunderland

North East

90

9.40%

67

£61,000

TS1

Middlesbrough

North East

117

8.80%

93

£56,000

LS4

Burley, Leeds

West Yorkshire

124

8.60%

16

£169,000

L6

Liverpool

North West

84

8.40%

51

£97,000

L1

Liverpool

North West

72

8.10%

191

£104,000

NE6

Newcastle-Upon-Tyne

North East

289

7.80%

123

£128,000

CF37

Pontypridd

Wales

132

7.70%

133

£125,000

M14

Manchester

North West

262

7.60%

12

£177,000

EH8

Edinburgh

Scotland

156

7.60%

52

£215,000

G31

Glasgow

Scotland

48

7.50%

46

£117,000

L15

Wavertree, Liverpool

North West

95

7.40%

78

£138,000

L2

Liverpool

North West

40

7.40%

123

£127,000

S1

Sheffield

South Yorkshire

97

7.20%

86

£112,000

G32

Glasgow

Scotland

50

7.20%

102

£92,000

CH41

Birkenhead

North West

38

7.10%

98

£84,000

AB11

Aberdeen

Scotland

103

7.10%

67

£93,000

G4

Glasgow

Scotland

88

7.00%

46

£172,000

AB24

Aberdeen

Scotland

270

7.00%

83

£99,000

Liverpool, Bradford and Sunderland out in front

Liverpool’s L7 postcode tops the buy-to-let yield table, generating yields of 10.30% from an average asking price of only £95,000.

The L7 postcode covers the area of Edge Hill and is in close proximity to Liverpool’s city centre. Five more Liverpool postcodes feature in the top 20, with returns ranging from 7.40% to 10.30%.

In second-placed Bradford, meanwhile, the BD1 postcode returns a rental yield of 10%, and the average asking price stands at only £57,000.

The BD1 postcode covers the main town centre of Bradford, offering commuters easy access to bigger cities such as Leeds.

Over in the North East, Sunderland – which has recently generated worldwide attention thanks to its football club’s starring role in Netflix hit ‘Sunderland Till I Die’ - is generating rental yields of 9.40% for landlords, with a solid student population helping to prop this percentage up.

The average asking price of a property in Sunderland is only £61,000, which means yields are far less squeezed.

The North West named as the best region

The North West is one of the top regions for strong buy-to-let yields, according to Mojo Mortgages’ analysis.

In addition to a number of profitable areas in Liverpool, the postcode area of M14 in Manchester -which covers Fallowfield - offers yields of 7.60%. Both these cities have a solid student population, plus property prices are relatively low.

The 10 worst buy-to-let postcodes

Postcode

Town

Region

Properties for rent

Average yield

Properties for sale

Average price

SW3

Kensington and Chelsea

London

145

2.1

112

1,612,797

RH20

Horsham

South East

29

2.1

158

547,781

W8

Kensington and Chelsea

London

172

2

108

1,891,603

HR9

Hereford

West Midlands

21

2

134

353,758

RG10

Wokingham

South East

42

2

113

611,725

B95

Stratford-upon-Avon

West Midlands

36

2

114

575,190

WC2

Westminster, Islington, Camden

London

129

2

101

1,671,087

HP9

Chiltern

South East

46

1.8

109

1,071,041

SW7

Kensington and Chelsea

London

231

1.7

125

2,097,726

W1

City of London

London

157

1.4

68

2,388,107

London and the South East perform the worst

By contrast, the capital, the South East and the West Midlands perform much less strongly when it comes to rental yields, with incredibly high average asking prices in many cases.

Properties in the City of London and its surrounding boroughs generate the lowest yields in the UK, with average prices to buy above the £1 million mark.

The South East also features prominently in the top 10 worst buy-to-let list, more than likely due to areas such as Wokingham, Chiltern and Horsham being commuter hotspots, rather than areas to rent in.

Stratford-upon-Avon – the birthplace of Shakespeare - also features in the bottom 10 with an average yield of 2% and asking average prices at just over half a million.

Top 10 London buy-to-let areas

Postcode

Town

Properties for rent

Average yield

Properties for sale

Average price

Average asking rent (pm)

IG11

Barking

74

5.4

135

289,374

1,302

RM9

Dagenham, Becontree

39

5.3

77

314,129

1,380

RM8

Dagenham, Becontree Heath

29

5.2

46

317,533

1,388

RM10

Dagenham

24

5

53

317,609

1,336

UB5

Northolt

29

5

79

318,272

1,318

E12

Manor Park, Little Ilford, Aldersbrook

19

4.8

39

380,554

1,509

E6

East Ham, Beckton, Upton Park, Barking

35

4.7

85

384,498

1,497

E13

Plaistow, West Ham, Upton Park

39

4.7

77

378,612

1,486

RM13

Rainham, South Hornchurch, Wennington

17

4.6

82

366,944

1,412

RM6

Chadwell Heath, Little Heath

33

4.6

54

346,458

1,335

Despite the capital having the worst yields of anywhere in the country, London does still have many pockets where rental yields are much stronger. London’s rental market is huge and there is always a very large demand for rental properties in the capital. Tenants have a much wider variety of properties to choose from.

IG11 in the London Borough of Barking offers the best rental yield and average asking prices of £289,374. Dagenham features three times in the top 10, with areas such as Becontree and Becontree Heath also generating yields of more than 5%. Houses prices in these areas tend to be much more affordable.

The London Borough of Ealing only featured once in the top 10 with Northolt generating an average yield of 5%.

The 10 worst London buy-to-let areas

Postcode

Town

Properties for rent

Average yield

Properties for sale

Average price

Average asking rent (pm)

SW14

Mortlake, East Sheen

28

2.5

70

994,028

2,030

SW5

Earl's Court

240

2.4

142

1,076,946

2,187

EC2

East Central London

177

2.4

140

1,325,933

2,705

N6

Highgate, Hampstead Heath

79

2.2

98

865,998

1,614

SW3

Chelsea, Brompton, Knightsbridge

145

2.1

112

1,612,797

2,868

SW1

Central London

269

2.1

195

1,529,559

2,666

W8

Kensington, Holland Park

172

2

108

1,891,603

3,119

WC2

Central London

129

2

101

1,671,087

2,811

SW7

South Kensington, Knightsbridge

231

1.7

125

2,097,726

2,981

W1

Central London

157

1.4

68

2,388,107

2,807

High property prices in London mean that a buy-to-let property in the area must work hard to return a profit. In some areas of the city, that can prove to be very difficult.

The postcode of W1 in Central London generates the worst yield at 1.4%, with the average asking price of a property around £2.3 million, whilst the average asking rent is a massive £2,807 per month.

The average salary in London equates to £37,000 annually, and £2,300 monthly, making it unaffordable for many sole renters to go it alone.

The best of the ‘worst’ is in Hampstead Heath, N6, where the average asking price is lower than in other areas of the worst 10, at £865,000, and average asking rent is £1,614, making the buy-to-let yield 2.2%.

icon

Please login to comment

MovePal MovePal MovePal
sign up