Are you a prospective or existing landlord on the lookout for a high yield property investment? Then you’ve come to the right place! Here at Mistoria Group, we have decades of experience helping landlords to find properties in some of the most lucrative and profitable regions in the UK – with a particular focus on the North West of England.
Below, we list some of the best rental yield hotspots in the UK to help you decide which area is worth exploring for your next buy-to-let investment property.
To put these rental yield hotspots into perspective, we also explain what is generally considered to be a good rental yield in the UK, showing you how picking the perfect location for your property investment can make a big difference to your profit.
What is rental yield and why does it matter?
First and foremost, let’s find out what ‘rental yield’ actually means. Put simply, rental yield refers to the amount you can expect to earn from renting out the property. To calculate this figure, you will need to find out how much rental income the property is likely to generate annually. The annual rental income should then be divided by the price of the property and multiplied by 100 to give you a percentage.
By way of illustrating, if the monthly rental income of a property is predicted to be £900, then the annual rental income will be £10,800. If the property itself cost £200,000, you would then divide the annual rental income (£10,800) by the cost of the property (£200,000) which produces the figure 0.054. Simply multiply this figure by 100 to create a percentage, and you can expect the property to generate a 5.4 per cent gross rental yield.
However, to calculate the net rental yield and receive a more accurate idea of the income a buy-to-let property is likely to generate, you will need to consider the associated costs too. This includes expenses like property maintenance costs, tax, insurance, and mortgage fees. Once these have been taken into consideration and deducted from the annual rental income, you can use the same calculation to determine the net rental yield.
What is a good rental yield in the UK?
According to NatWest, a good rental yield in the UK is between six and eight per cent. However, it’s important to bear in mind that this figure will vary based on where the property is located. Not to mention, a ‘good rental yield’ is often considered any amount above the average rental yield for that area.
For example, within certain UK hotspots there may be a higher average rental yield than the rest of the UK or the surrounding areas. As a result, you may want to consider charging a greater rental amount for properties located within these hotspots to ensure you achieve an appropriate rental yield.
Best rental yield hotspots in the UK
If you’re struggling to pinpoint the best location for your next (or first!) buy-to-let property, why not allow us to inspire you? Due to the higher property prices in London and the surrounding areas, investors have been moving away from the capital and looking north in an attempt to reap the rewards of lower property prices and increase their net rental yields.
Having benefitted from regeneration projects, significant investment, and an influx of London-based renters searching for more affordable accommodation, the north of the UK presents a plethora of opportunities for property investors and landlords. Below, we explore some of the best rental yields in the North West as well as other areas across the UK to help you determine which property hotspots are worth investing in.
Featuring some of the highest rental yields in the UK, Liverpool is another bustling city that can achieve incredible rental yields of up to 10 per cent – especially properties located in the bright and atmospheric city centre (L1)! Other postcodes in Liverpool such as L2, L3, L4, L6 and L11 also tend to generate fantastic rental yields between seven and nine per cent.
As one of the largest university cities in the UK, Manchester boasts five universities, making it a prominent location for students and post-graduate young professionals alike. With property prices up to an impressive 40 per cent cheaper than London, rental yields can be upwards of 10 per cent – especially in areas like M14.
Looking for profitable property investment opportunities in West Yorkshire? Why not consider Bradford instead of some of the larger, more major UK cities like Manchester, Liverpool, and Leeds? With an economy worth over £11bn, it’s the tenth largest economy in England and can generate incredibly high rental yields. BD1, for example, has an average rental yield of 10.6 per cent.
Home to students, young professionals, and even families, Leeds offers a diverse rental market for property investors to take advantage of. With LS2 and LS4 areas offering attractive average rental yields of eight per cent, doing your research into the Leeds buy-to-let property market could help you to reach those higher rental yields.
Newcastle Upon Tyne
A combination of outstanding universities, fantastic travel links, and a strong business community makes Newcastle stand out as a popular location for professionals, students, and even families. Despite increases in house prices across the city, Newcastle is still considered to be an affordable location for tenants, while landlords can still benefit from great rental yields. NE6, for example, offers investors an average rental yield of 9.8 per cent.
Having recently emerged as a property investment hotspot in the past couple of years, Yorkshire is certainly one to watch! Home to 180,000 students and boasting an unbelievable £110bn annual economy, it’s a popular place to both work and study. Thanks to the relatively low property prices and the strong rental demand, some Yorkshire locations can produce impressive rental yields.
Boasting a selection of universities, countless businesses, and amenities of every shape and size, Birmingham offers investors impressive rental yields of up to 6.56 per cent (according to data from Zoopla). Receiving plenty of investment, the second biggest city in the UK is a great place to consider investing in HMOs (Houses of Multiple Occupation) for single professionals, as well as student accommodation, and buy-to-let properties for families.
With NG1 and NG7 properties achieving average rental yields of over 11 per cent, looking further afield and away from London could certainly pay off! Home to a top 20 UK university, a wide range of historic locations, excellent amenities, and a lively nightlife, this central UK city is a popular choice for students, young professionals, and even families.
Contact Mistoria Group today!
If you’d like to find out more about the best places to invest in property in the UK, don’t wait to get in touch with Mistoria Group.
With more than 200 years of invaluable experience in the buy-to-let property investment industry, our knowledgeable team of expert chartered accountants, estate agents, and property professionals are on hand to help.
Specialising in helping our clients to buy and sell property in the UK (and more specifically the North West), we’ve opened branches in Bolton, Liverpool, Manchester and Salford.
Regardless of whether you’re looking to invest in Manchester or any other area of the North West, there are plenty of high-yielding property investment opportunities to explore across the region.
To speak with a member of our team about your high yield property investment requirements, feel free to give us a call on 0800 500 3015. Alternatively, you can also get in touch via email (using firstname.lastname@example.org) or by heading online to fill out our convenient online contact form. Once we’ve received your enquiry, we’ll be in touch soon to find out more!