Investors looking for top buy-to-let yields are better off heading North as returns are stronger, according to a quarterly index.
While London house prices have risen more than anywhere else, the city has the lowest rental yields for prospective buyers, according to BM Solutions. Property investors buying in central London – travel zones one and two – will receive an average of 5.5% annual return from rents, while in the outer zones, this rises slightly to 5.9 per cent.
The index shows the average UK rental yield stood at 6.2% between April and June 2014.
According to The Mistoria Group, leading investment specialists in student property, investors need to head to the North West and North East to beat the national average, where yields sit on average at 6.4%.
Mish Liyanage, Managing Director of The Mistoria Group comments:
“The BBC’s move to Salford has created a lot of interest in the area and this, coupled with the planned expansion of Manchester and Liverpool area, is good news for buy-to-let investors in the North West. Property values in the Greater Manchester city of Salford and Liverpool have risen faster than in any other town in Britain since the start of 2014.
“The North West offers buy-to-let landlords a multitude of affordable properties that will give net returns of up to 10%. For example, an investor can buy a HMO student let property close to a university that has been fully refurbished and furnished, and that is already tenanted for the coming year, for less than £150,000. This will give investors annual net returns of 9%.
“By choosing the right property and the right agent, investors can sit back and after years of working for their money, can finally see their money working for them. So if investors want top yields, they should avoid London and head north.”
Retiree, Joy Townley from Calne, Wiltshire recently bought two investment properties in Salford through The Mistoria Group:
“I decided that property was the right choice for me because of the current low interest rates and I wanted a better return on my capital. I live in the South West of England where property is extremely expensive. Buying investment property in this part of the country was out of the question and the North West is a growing market. The numbers just added up and I am enjoying a consistent income stream. I’ll be keeping hold of the properties for the long term.”
This article first appeared on the Property Reporter website on 29th August 2014.