Tax changes have posed some challenges to buy-to-let investors, but there are still hot spots of profitability to be exploited, according to the latest figures.
Private Finance research looked at buy-to-let yields in the UK and discovered that the cities of Liverpool and Nottingham in the East Midlands are the best performing locations in Britain when it comes to property investments.
The research found that both of these cities offer an average rental yield for investors of 6.2 per cent after mortgage costs have been taken into account. This figure compares very favourably to some areas of London, for example, where yields are currently under two per cent. Tips on finding the best yields can be found on the Financial Times website.
Top spot
Liverpool has been on top of the yields table since May 2017, making it a popular choice for investors, including those using property inventory software. Nottingham, meanwhile, has gone up from second place as average monthly rents have gone up by £121.
Cardiff made the third spot as average city rents went up to £1,301 from £946 in a month and average yields hit six per cent. Greater Manchester and Southampton completed the top five for January 2018, both providing average 5.9 per cent rental yields and good prospects for property investors and clients of property software specialists such as https://inventorybase.co.uk/.
Demand for property
Private Finance director Shaun Church said that university towns and bigger cities continue to offer the best investor opportunities thanks to the level of rental demand.
The figures demonstrate how high purchase costs in the South East and London can hamper yields, however. Rents in London are also falling as it appears that tenants have run out of funds when it comes to increasing their rental budgets each month.
The Private Finance research found that the London borough of Haringey was providing yields of only 1.4 per cent in January, with average rents sitting at £1,493 a month and prices sitting at £546,185. Harrow had yields of 1.6 per cent, whilst Hounslow was just behind at 1.7 per cent. Croydon, Watford and Lewisham all had 1.9 per cent yields, demonstrating how prices or rents must rise in order for investors in the capital to maximise on their property buys.