Every landlord wants to gain the most profit on their buy-to-let properties, especially now that the responsibilities of landords are increasing. TotallyMoney have analysed 500,000 properties across England, Scotland and Wales to find out the buy-to-let yield of each postcode.
The best buy-to-let areas
TotallyMoney ranked postcodes by percentage yield. L1 in Liverpool came out as the highest ranked, with 10% yield. The median rental value in L1 is £750, and the median asking price is £90,000. Second at 9.51% return on investment is FK3 Falkirk, and third is G52 Glasgow at 8.71%
Liverpool has 5 other postcodes in the top 25 where the return on investment ranges from 7.13% to 8.67%.
A great place to look for buy-to-lets within England is in the North East. There’s a few cities which thrive with students such as Sunderland, Newcastle and Middlesbrough. The best yields in the North East are TS1 in Cleveland, where the asking prices average around £60,000 with rent prices at £425, giving an attractive 8.5% return on investment. Teeside boasts a 7.6% yield, and Sunderland enjoys 6.9%.
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| Rank | Postcode | Postcode Town | Properties for Rent | Median Rental Value | Properties for Sale | Median Asking Price | Yield |
|---|---|---|---|---|---|---|---|
| 1 | L1 | Liverpool | 187 | £750 | 368 | £90,000 | 10.00% |
| 2 | FK3 | Falkirk | 30 | £495 | 39 | £62,450 | 9.51% |
| 3 | G52 | Glasgow | 46 | £595 | 66 | £82,000 | 8.71% |
| 4 | L11 | Liverpool | 55 | £650 | 31 | £90,000 | 8.67% |
| 5 | TS1 | Cleveland | 65 | £425 | 34 | £60,000 | 8.50% |
| 6 | KA1 | Kilmarnock | 68 | £450 | 75 | £64,995 | 8.31% |
| 7 | L6 | Liverpool | 153 | £575 | 59 | £85,000 | 8.12% |
| 8 | LE1 | Leicester | 176 | £667 | 116 | £100,000 | 8.00% |
| 9 | LS2 | Leeds | 111 | £825 | 32 | £125,000 | 7.92% |
| 10 | S1 | Sheffield | 219 | £750 | 68 | £115,000 | 7.83% |
| 11 | CF43 | Cardiff | 36 | £425 | 35 | £67,000 | 7.61% |
| 12 | TS3 | Cleveland | 60 | £475 | 63 | £74,975 | 7.60% |
| 13 | L2 | Liverpool | 115 | £850 | 106 | £135,000 | 7.56% |
| 14 | PA3 | Paisley | 42 | £425 | 43 | £68,500 | 7.45% |
| 15 | L3 | Liverpool | 282 | £740 | 360 | £119,950 | 7.40% |
| 16 | SR8 | Sunderland | 85 | £450 | 143 | £73,725 | 7.32% |
| 17 | G51 | Glasgow | 74 | £595 | 31 | £97,500 | 7.32% |
| 18 | NE8 | Gateshead | 148 | £575 | 75 | £94,950 | 7.27% |
| 19 | AB11 | Aberdeen | 173 | £600 | 45 | £99,995 | 7.20% |
| 20 | G67 | Glasgow | 57 | £450 | 65 | £75,000 | 7.20% |
| 21 | G32 | Glasgow | 46 | £475 | 76 | £79,995 | 7.13% |
| 22 | L4 | Liverpool | 136 | £475 | 94 | £80,000 | 7.13% |
| 23 | G21 | Glasgow | 30 | £550 | 31 | £92,995 | 7.10% |
| 24 | LA14 | Lancaster | 50 | £500 | 128 | £85,000 | 7.06% |
| 25 | SR5 | Sunderland | 46 | £495 | 40 | £84,950 | 6.99% |
The worst buy-to-let areas
The lowest percentage yield on buy-to-let property in the UK falls in AL5, St Albans. Here, the median asking price is £800,000 and rental value is £1,300. St Albans is a commuter location for London workers which may be the explanation for its low score of 1.95% yield.
There are other popular commuter havens in the bottom ten such as RG10 in Reading at 2.26%, and Kingston upon Thames KT7 at 2.20%
Second from the bottom comes Ipswich, IP13. Here, properties can cost £397,500 with the monthly rent of £650; this results in a yield of just 1.96%.
There is a pattern to those locations at the bottom of the return on investment pile; the average house prices are all above the UK’s average of £232,710. If you wish to invest, you’d be better purchasing a cheaper property in a different location where the monthly rental prices create a better yield.
| Rank | Postcode | Postcode Town | Properties for Rent | Median Rental Value | Properties for Sale | Median Asking Price | Yield |
|---|---|---|---|---|---|---|---|
| 1 | WC1X | London | 440 | £2,825 | 76 | £1,484,408 | 2.28% |
| 2 | RG10 | Reading | 68 | £1,100 | 34 | £585,000 | 2.26% |
| 3 | GU10 | Guilford | 71 | £1,295 | 116 | £699,950 | 2.22% |
| 4 | KT7 | Kingston upon Thames | 41 | £1,350 | 47 | £737,475 | 2.20% |
| 5 | S7 | Sheffield | 98 | £638 | 61 | £350,000 | 2.19% |
| 6 | B73 | Birmingham | 69 | £680 | 60 | £375,000 | 2.18% |
| 7 | W8 | London | 400 | £3,356 | 59 | £1,962,500 | 2.05% |
| 8 | GL6 | Gloucester | 50 | £795 | 92 | £470,000 | 2.03% |
| 9 | IP13 | Ipswich | 34 | £650 | 62 | £397,500 | 1.96% |
| 10 | AL5 | St Albans | 115 | £1,300 | 107 | £800,000 | 1.95% |
What if you want to become a landlord in London?
There is high demand for properties to rent in London, as the property prices are so expensive. The best yield in London can be gained in E12, covering Manor Park and Aldersbrook, at 6.04%.
Romford holds 7 of the top 20 locations in London, the highest being RM9 with a yield of 5.46%, and the lowest being RM17 at 4.58%.
The worst buy-to-let postcode in London is W8, Kensington. Here the average property price is a whopping £1,962,500, with monthly rent prices demanding £3,356. This equals a 2.05% yield, which is a small amount for such a large property investment.
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I began writing for Property Press Online in October 2019. Particular areas of interest are housing market news and new developments in the market.
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