Lettings agency chain Lomond has revealed a list of what it calls “up and coming rental hotspots” with yields having strengthened considerably over the last year as rents have risen and house prices cooled.
The agency says that over the last year, the average monthly rent across England and Wales has increased by 8.2%, far outperforming the 2.2% growth seen in house prices. As a result, the average rental yield has climbed from 4% to 4.2%.
Every region of England and Wales has seen yield growth with London (+0.4%), the South East (+0.3%) and North West (0.3%) seeing the largest change, whilst the North East is home to the strongest overall yield at 4.9%.
At local authority level there are 129 areas of England and Wales where rental prices have grown whilst house prices have softened or not moved .
Here’s the areas to have seen the largest growth of 0.4% or more in rental yield across each region: –
– East Midlands: Nottingham (+0.6%), Ashfield (+0.5%), Broxtowe (+0.4%) Derby (+0.4%) and Erewash (+0.4%).
– East of England: Ipswich (+0.8%), Hertsmere (+0.7%), Watford (+0.7%), Harlow (+0.6%) and Stevenage (+0.6%).
– London: Brent (+1.3%), Hammersmith and Fulham (+1.2%), Westminster (+1.2%), Tower Hamlets (+0.9%) and Haringey (+0.7%).
– North East: Hartlepool (+0.6%).
– North West: Salford (+0.8%), Burnley (+0.7%), Knowsley (+0.5%), Blackburn with Darwen (+0.5%) and Bury (+0.4%).
– South East: Reading (+0.8%), Folkestone and Hythe (+0.8%), Portsmouth (+0.7%), Espwom and Ewell (+0.7%) and Thanet (+0.6%).
– South West: Exeter (+0.4%), Swindon (+0.4%),
– Wales: Merthyr Tydfil (+1.4%), Denbighshire (+0.5%), Cardiff (+0.5%), Gwynedd (+0.4%) and Neath Port Talbot (+0.4%).
– West Midlands: Birmingham (+0.4%), Solihull (+0.5%)
– Yorkshire and the Humber: York (+0.5%)
A Lomond spokesperson says: “Generally speaking, the property market has held its own over the last year with house prices standing strong despite the turbulence caused by higher mortgage rates. Now we have seen the Bank of England reduce rates we are certainly see significant optimism coming back in from both buyers and sellers.
“When breaking the market down at a more granular level, there are a multitude of areas that have seen minimal movement in house prices yet where rental values have performed very strongly indeed.
“This increased level of housing market affordability coupled with a strong rental market performance has helped to significantly improve the yields available to buy-to-let investors and created opportunities in markets that they may not have previously considered.
“This demonstrates the importance of strategic investment for landlords when looking to create or expand their portfolio.”
