Buy to Let Property Hotspots June 2015

03/06/2015
There are pockets of England and Wales that are getting far greater rental yields for buy to let investors. This years' research is showing some new areas that have a far greater rental and a lower property price. Read on for our hotspot list to help you target.

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How do you increase you buy to let yield

Here are some of out top tips for increasing your rental yield:

  • Buy near a University/college - having a regular churn of new tenants will limit the number of empty months.
  • Buy in more affordable areas - a lower property price will help increase your rental yield.
  • Reduce your costs - negotiate with managing agents, insurers and other costs the the tenant doesn't have to cover.
  • Review buying as a company - with new measures coming into play you may find buying the property through a company will enable you to reduce all of your costs from the income you gain from the property (from 2017 onwards the amount of mortgage interest you can deduct from your income will reduce to zero in 4 years). You should speak to a tax specialist to review your individual position.

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The buy to let hotspot list

It is important to note that property prices can go down as well us up.

CITY Av
Monthly
Rent
YIELD %
Manchester £719 7.98
Kingston-upon-Hull £450 7.81
Blackpool £488 7.35
Forest Heath (a Suffolk district, includes Newmarket)
£1,036 7.26
Coventry £702 7.20
Southampton £900 7.13
Nottingham £524 7.04
Liverpool £494 6.56
Cardiff £802 6.38
Portsmouth £825 6.36

The research produced listed the hotspots in terms of yield. This is the annual interest or income you might receive from your investment and is normally stated as a percentage of the property price. The lower you pay for a property and the greater the rent value is, the better the yield although costs will eat into this yield. It is important to note that growth or potential growth in house prices is not factored in and although it can be estimated from past performance, there are no guarantees.

Manchester is notable because more than 25% of its housing stock consists of buy to let properties combined with comparatively low house prices and only modest increases in recent times (4.4% in the last year). It continues to be very popular with students and young professionals.

Buy to let hotspots - yield growth order

The research also examined increases in yields. It found that Reading and Berkshire experienced the highest year-on-year yield increases, at more than 12.5%, to 5.48%. Southampton, Brighton and Hove, Cheltenham, Bristol, Bournemouth, Manchester, Oxford and Eastbourne all also had high places in this list.London remains a very popular buy to let location, with yields in some areas as high as 6%, such as in Newham. Similar areas include Brent, Southwark Enfield and Lewisham and these all reflect that where house prices are lower, yields are higher.

*Fixed Fee – No Sale No Fee – On all Mortgage Lender Panels


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