It’s no secret. Landlords are always looking for the best high yield areas to invest in. So, we thought we could help with your research by writing an article on it!
At the start of the year, TotalMoney researched across the United Kingdom into where the best buy-to-let areas are. They looked at around 500,000 houses across England, Scotland and Wales whilst analysing the yields generated in the area.
Where are the Best buy-to-let areas?
Of those looked at, sixteen of the top twenty-five postcodes were in the North West and Scotland. Predominately, most of the North West postcodes were in the area of Liverpool. According to their data, the top ten buy-to-let areas are as follows:
- Liverpool, Postcode L1, Rental Yield of 10%
- Falkirk, Postcode, FK3, Rental Yield of 9.51%
- Glasgow, Postcode G52, Rental Yield of 8.71%
- Liverpool, Postcode L11, Rental Yield of 8.67%
- Cleveland, Postcode TS1, Rental Yield of 8.5%
- Kilmarnock, Postcode KA1, Rental Yield of 8.31%
- Liverpool, Postcode L6, Rental Yield of 8.12%
- Leicester, Postcode LE1, Rental Yield of 8%
- Leeds, Postcode LS2, Rental Yield of 7.93%
- Sheffield, Postcode S1, Rental Yield of 7.83%
Within the top twenty-five, postcodes in the North East prominently featured five times. With Cleveland TS1 coming fifth and Cleveland TS3 coming in at twelfth place. Also in the top 25, Sunderland featured twice with the postcodes SR8 and SR5, plus in 18th place sat Gateshead with the postcode NE8.
All of the top 25 postcodes (apart from SR5 in Sunderland that came in at 6.99%) had around a yield higher than 7%. This included Leeds with LS2 (7.92%), Cardiff with CF43 (7.61%) and Aberdeen with AB11 (7.2%).
Where are the worst areas for buy-to-let areas?
Looking at TotalMoney’s data, there has been some surprising areas come within the top 25 areas that are the worst buy-to-let in terms of high yield. Within the data, it has conveyed that even some commuter places have come out as having the lowest yields.
Within the top ten was:
- St Albans, Postcode AL5, Rental Yield of 1.95%
- Ipswich, Postcode IP13, Rental Yield of 1.96%
- Gloucester, Postcode GL6, Rental Yield of 2.03%
- London, Postcode W8, Rental Yield of 2.05%
- Birmingham, Postcode B73, Rental Yield of 2.18%
- Sheffield, Postcode S7, Rental Yield of 2.19%
- Kingston-Upon-Thames, Postcode KT7, Rental Yield of 2.2%
- Guildford, Postcode GU10, Rental Yield of 2.22%
- Reading, Postcode RG10, Rental Yield of 2.26%
- London, Postcode WC1X, Rental Yield of 2.28%
The lowest, according to their data, was AL5, close to the commuter town of St Albans. The average buying price around the area is £800,000 and the average rent being £1,300; Thus creating a small yield of 1.95%.
How were these best buy-to-let areas calculated?
TotalMoney have researched from data they have found on around 478,486 properties across the UK, both rentals and for sale. When defining the word ‘yield’ the business used it in basic terms. Meaning they looked at the average annual rent and then divided this by the average asking price within the area.
However, one thing to bare in mind is that these figures do not take in mind the cost of a mortgage. Plus, they looked at thirty for sale properties and thirty rental properties.