A new analysis suggests landlords quitting the sector and selling in high-rent areas enjoy strong premiums.

A lettings agency has analysed average house price data in England’s high rental demand areas according to leading property portals, and compared it to the wider average house price in each region.

Across England, the average house price in areas of high rental demand is £372,055. This is a price premium of 23% (£69,662) compared to the nation’s wider average house price of £302,393
 
This average premium is even stronger in certain regions of the country.
 
In the North West, the average house price in high rental demand areas is £289,863. This is a premium of 33% (£72,338) compared to the region’s overall average price of £217,525
 
In the North East, the high rental demand house price premium is 30%, while Yorkshire and the Humber offers a premium of 29%.

The premium also exceeds the national average in the South East (28%), and West Midlands (25%).
 
Even in the East of England, where the high rental demand price premium is at its lowest, homes still sell for an average of 15% above the wider regional average.
 
Additional analysis shows that high rental demand areas offer landlords who invest an average yield* of 5.49% versus 5.15% in non-high rental demand areas.
 
Across England, there are an estimated 24,857 properties located in high rental demand areas currently available on the market. The highest proportion of these are found in the South East (21%), followed by the East of England (18%), South West (17%), North West (12%), East Midlands (12%), West Midlands (10%), Yorkshire & Humber (7%), London (2%), and the North East (1%).

Marc von Grundherr, director of Benham and Reeves – the agency commissioning the analysis – says: “Things may not have been easy for buy-to-let landlords in recent years, as increased rules and regulations have been implemented to reduce the profitability of the average investor’s portfolio.
 
“However, it remains a strong and reliable investment, with long-term stability that often cannot be matched by other more volatile investment asset classes such as stocks or collectables.”