North of England offers best efficiency for buy to let landlords
New research confirms that the Northern half of England offers the best investment for buy to let landlords due to a combination of affordable prices and rental return.
Stoke on Trent is named as the most efficient location, followed by Oldham and Liverpool while when it comes to yields the highest is found in Leeds of the 100 towns and cities surveyed.
Overall the 10 most efficient areas to become a landlord in Britain are in the North while every one of the least efficient buy to let locations are in the South with Poole in Dorset the least efficient, followed by central London and Sevenoaks in Kent.
The analysis from investment market place Property Partner looked at the average income, average property price and average rent in each area. It says that investors can enter the buy to let market more easily if their income is relatively high compared to local property prices, and will earn a stronger rate of income return if those properties command high levels of rent relative to their price.
The rest of the top 10 are Leeds, Middlesbrough, Newcastle, Stockton-on-Tees, Gateshead, Rotherham and Rochdale. While the rest of the least efficient are Bournemouth, Cambridge, Oxford, Winchester, St Albans, Chelmsford and Brighton.
Leeds had the highest yield of all 100 towns and cities at 6.92% and came in fourth overall with Gateshead yielding 5.78%, Stoke-on-Trent 5.67%, Rochdale 5.6% and Newcastle 5.59%.
The lowest yield was in Poole at 1.94%, followed by Sevenoaks at 2.48%, Cambridge at 2.51%, Chelmsford 2.53%, St Albans 2.55% and Bournemouth 2.68%, all markets with high demand from owner occupiers prepared to pay premium prices for a popular location.
‘There is a clear North-South divide in the investment opportunities facing buy to let landlords. We have always been at pains to point out to investors that prime locations such as Kensington and Chelsea can offer some of the lowest yields available, because prices have raced ahead while rents have failed to keep pace,’ said Dan Gandesha, founder of Property Partner.
‘It just goes to show, you shouldn’t always follow the crowd and the right investment could be on your doorstep where there is far less overall demand,’ he added.