The Top UK Locations for Property Investment with Rental Yields Up to 9.8% in 2023

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Rental yield is a crucial factor for landlords and property investors as it determines the profitability and return on investment of a rental property.

Natwest, a prominent financial UK-based bank, suggests that a reasonable level of rental yield falls between 6% and 8%.

However, certain locations across the UK have managed to surpass this benchmark, making them particularly attractive to landlords and investors.

In this article, we will delve into the rental yield rankings and highlight Leyburn, Edinburgh, Paisley as the top-performing locations while also discussing lower-yielding areas like York and London.

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The Top 3 UK Locations For Rental Yield 2023

Area

Median Rental Value

Properties For Sale

Median Asking Price

Yield

Leyburn

£1,850

42

£227,500

9.8%

Edinburgh

£1,800

1,716

£315,000

6.9%

Paisley

£700

262

£126,000

6.7%

Leyburn

Leading the pack with a 9.8% yield.

Topping the list of high-yielding locations is Leyburn, where landlords can take advantage of impressive rental yields of 9.8%. Situated adjacent to the picturesque Yorkshire Dales National Park, Leyburn benefits from its scenic surroundings and the resulting influx of tourists.

The increased demand for rental accommodation due to tourism contributes to Leyburn’s strong rental market, enabling landlords to achieve excellent returns on their investments.

Edinburgh

A university city with a 6.9% yield.

Securing the second position in the rental yield rankings is Edinburgh, a renowned university city and Scotland’s capital. The city’s vibrant cultural scene, historical attractions and reputable educational institutions make it an appealing choice for students, professionals and tourists alike.

The high demand for rental properties leads to a healthy rental market, with landlords enjoying a rental yield of 6.9%.

Paisley

Claiming third place with a 6.7% yield.

Paisley, located in the west central lowlands of Scotland, captures the third spot in the rental yield rankings. Its proximity to Glasgow and excellent transportation links make it an attractive location for commuters who seek a more affordable living option.

With a rental yield of 6.7% landlords in Paisley can benefit from the city’s strategic location and the associated demand for rental properties.

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The Worst 3 UK Locations For Rental Yield 2023

Area

Median Rental Value

Properties For Sale

Median Asking Price

Yield

Bangor

£534

188

£242,500

2.6%

Settle

£688

22

£322,500

2.6%

Ilkley

£895

152

£389,500

2.8%

Bangor & Settle

The lowest yields in the UK.

Among the surveyed locations, Bangor and Settle stand out as having the lowest rental yields in the UK, with a meagre 2.6%.

This finding suggests that these areas face challenges in attracting tenants or have significant discrepancies between rental income and property values.

York & London

Lower Yields in prominent cities.

While Leyburn, Edinburgh and Paisley showcase impressive rental yields, cities like York are experiencing relatively lower yields ranging from 5.5% to 5.9%.

York, a historic city with a rich cultural heritage, continues to be sought after by tenants, but the tighter rental market and higher property prices result in slightly lower yields. As a result, prospective tenants searching for apartments to rent in York are struggling to find the right properties due to less landlords and a bed shortage.

Similarly, London, the UK’s capital, faces a highly competitive rental market and soaring property prices, leading to yields on the lower end of the scale.

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Who Are Bower Home Finance?

Established in 2006, Bower Home Finance has grown considerably to be one of the country’s most trusted providers of home finance and equity release advice, with expert independent advisers across the whole of the UK.

Held in high regard by the public and industry peers, Bower is a multiple award winning company and a Platinum Trusted Service Award winner with FEEFO, the independent.

Bowers ethos of Trust Honesty and Service is at the core of all customer service; thereby ensuring the customer feels in control of their decisions and has ultimate confidence in their choices. Explaining all the options and the pros and cons to a customer is part of the process and the role of the adviser is to ensure the best possible outcome for every client.

Bower is a proud member of the Equity Release Council and adheres to and promotes the standards of the Council. Geoff Charles, Bowers CEO is a current member of the Council’s Standards Board.

Towns across the UK were analysed using Realyse and Home.co.uk that both specialise in property data. The information was used to provide a report designed to help property investors, or those looking to start a property portfolio.

The buy-to-let yield was then calculated by using the median monthly rent, divided by the median asking price. In total, we assessed 204,126 properties across the UK, Yorkshire, and Scotland, and of these properties, 66,453 were found to be rental properties, and 137,673 to be on the market.

Andrea Rozario Chief Corporate Officer Of Bower Home Finance Says:

“Property values in the UK have historically shown long-term growth, providing the potential for capital appreciation. However, it is crucial to be aware of the risks involved. Property prices can fluctuate, and there is no guarantee that values will always rise.”

“Market conditions, such as changes in interest rates, legislation, and taxation have recently made buy-to-let as an investment increasingly more difficult, and these factors have impacted rental yields and profitability.”

“Property values in the UK have historically shown long-term growth, providing the potential for capital appreciation. However, it is crucial to be aware of the risks involved. Property prices can fluctuate, and there is no guarantee that values will always rise.”

“Investors over the age of 55 needing to raise money may choose equity release as part of their financial strategy. Clearly this would need considerable thought, understanding of the costs, and careful assessment of all options. This process requires qualified specialist advice to ensure all the aspects are examined, but this does not rule out that for some landlords, it could be a very good solution.”

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Tom is a Digital Content Writer passionate about sustainable property & property trends. Regardless of the subject, he will always write blogs of the best calibre. Read more about Tom here.

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About Tom Condon 126 Articles
Tom is a Digital Content Writer passionate about sustainable property & property trends. Regardless of the subject, he will always write blogs of the best calibre. Read more about Tom here.

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