Canny buy-to-let investors should look north if they want to get the best returns, new Zoopla research reveals.
Its top ten hotspots for landlords looking for the highest rental yields puts Middlesbrough in North Yorkshire in first place, with a gross rental yield of 7.7% thanks to low property prices and a steady average monthly rent of £450 for a two-bed house. The North East and Scotland have out-performed the rest of the UK, with East Ayrshire, North Ayrshire, Inverclyde, Glasgow City, and Stirling all ranking highly.
Zoopla says it’s seen an uplift in investor interest, stimulated by the stamp duty holiday announcement in July. By region, while Scotland and the North East topped the polls with yields of 7.3% and 6.6% overall, Wales ranks in third place with yields of 6%, close behind is Yorkshire and The Humber with yields of 5.5% and the West Midlands with yields of 5.4%.
At the other end of the spectrum, yields were lowest in the City of London at 3.1%, despite average monthly rents of £2,598, followed by Kensington and Chelsea, and the City of Westminster.
Tom Parker, consumer spokesperson at Zoopla, says while yields are one consideration for investors and for those debating their first foray into the buy-to-let market, it’s worth looking at house price growth forecasts for an area and whether rents are likely to rise over time.
“With all those factors taken into account, now could be a good time to invest or expand a portfolio, with investors able to benefit from the stamp duty holiday – paying only the 3% levy – until March 2021,” advises Parker.