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If you’re a landlord looking to make a consistent income from your properties, rentals are obviously the way to go. However, making sure you’re getting a strong yield from your investment is essential, otherwise, you could be waiting a while for a positive ROI.

This guide will walk you through some of the best rental hotspots in the UK right now, according to up-to-date data. All of the locations below are 8% and above – a huge jump from the 3.63% UK average. Let’s jump straight into it.

Sunderland

Starting at the top with the best rental yield in the country, we have Sunderland. Sunderland is a Northeast city that sits on the coast. It has become a property hotspot for those seeking huge discounts on property deals and strong rental income.

Sunderland has a very low average property price of £138k, and this price has stayed relatively consistent over the past 12 months. Compare this figure to the UK average of £283k and you can begin to see why Sunderland is a lucrative investment.

As for rental yield, you can expect to make in the region of 12% in Sunderland if current market conditions hold! The cheap prices combined with the rental prices make this a superb investment for steady cash flow.

At the time of writing this, 1-bed properties are going for £536 on average per month and 2-bed properties are renting for £710. If a HMO strategy is your preferred choice, double bedrooms with en-suites are renting for £400/month. There’s plenty of money to be made in this area.

Bradford

Another wildly cheap area with fantastic rental yields is Bradford. This location is another famous spot for cheap house prices, currently having an average price of £180k. If you’re an investor who is looking for a steal of a property deal, this could be your next location.

There are some properties which go as low as £18k in this location, yet rental prices are still very average. As a result, Bradford is currently providing rental yields upwards of 10%. In fact, on 3-bed properties in the area, current yields are in the 14% range!

With the high rental potential and low prices, Bradford is an area you should keep on your mind if you’re hunting for cashflow.

Liverpool

Liverpool has, for a long time, being an investment hotspot for all kinds of strategies. Whether you’re after HMO rental cashflow, highly profitable development projects or even fix and flips, Liverpool probably has you covered.

If you’re after a rental yield hotspot, Liverpool can also provide that. With lower than average property prices of £190k and consistent growth rate of 19%, Liverpool can secure you good cashflow and provide capital appreciation.

At the moment, Liverpool (specially, L7) rental yields are hitting an average of 9%! The most to be made is currently on 1-bed properties with yields exceeding 11% in some cases. This is most likely down to rents hitting a minimum of £506/month for 1-beds and HMO rooms averaging in the £400/month mark.

If you’re after a larger city with tons of potential, Liverpool is one to look at.

Middlesborough

Middlesborough is a small northern town with great investment potential for greener property investors. The location has exceptionally cheap property prices with an average of £93k – drastically lower than the UK average of £283k.

The area’s growth has had a consistent upward trend over the past few years, increasing by 10% over a 5-year period. Even now, you can get your hands on 2 beds for as low as £40k and 3 beds for as low as £33k.

Yields in the Middlesborough area are currently sitting at 9%. The average rent of a 1-bed property is around £490/month and the price for a double room with an en-suite in an HMO is £404/month. The cheap prices combined with the high rental prices allow investors to generate good consistent cash flow with little money down.

Blackpool

Blackpool location known for its tourist attractions, such as Pleasure Beach and Blackpool Illuminations. It’s also an investor hotspot for a range of different strategies, including both long-term and short-term rentals.

Current property prices in Blackpool are sitting a lot lower than the UK average at £109k, and the area has benefited from a gentle 4% increase in the past year. You can expect to pay anywhere from £42k for a 1 bed, £65k for a 2 bed, and £75k for a 3 bed.

With current prices, you can expect to achieve a rental yield of 8% in this area with the best yield being achieved on 2-bed properties. 1-bed properties are currently renting for £415/month and you can expect to achieve £440/month on a double room with en-suite in an HMO.

Dewsbury

An unlikely place you would have thought of investing for yield would be Dewsbury. This small town near Wakefield is a lesser-known spot but can still produce high rental yields with ease.

Property prices in the area are below the average, sitting at around £151k at the time of writing this. Prices have also been on the increase with the area achieving 7% since the start of 2022. So, not only does this location have good yields but also good potential for long-term growth.

Dewsbury is currently achieving rental yields as high as 8% despite being such a small town. This is because of a combination of below average prices and very good HMO room rental prices. You can rent out a room in this location of £476/month if it has a double and an en-suite. That’s more than any other location on this list.

Additionally, 1 beds go for £473/month and 2 beds go for £580/month on average. So, there is still money to be made here even with an HMO.

Summing it up

With the average UK rental yield being a miserable 3%, it can feel like a waste of time. However, if you look carefully at the data, you can pull out some very interesting opportunities.

Above, you’ll discover impressive rental yield hotspots which have the potential of earning 8%+, which is something you don’t see every day. Either one of these locations can bring you in a solid return, so pick one that aligns with your investment strategy and jump straight into it.

This article was written by Lewis Ridley. Lewis is a passionate content producer over at Property Market Intel – a platform that enables property investors to make smarter data-driven decisions. He has been involved in the property industry for several years with his favourite strategy being BRRR. You can contact him over on PMI’s website for any further questions.

 

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