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Insight & Opinion

Buy-to-let investors told to head north for best returns

Author: Gemma

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The buy-to-let market, it’s no secret, is red hot at the moment. According to recent reports, investors are enjoying their very best returns in years, with rents having surpassed all-time peaks in August and returns for the past 12 months now reaching a rather impressive 13 per cent on average.

However, the hottest areas in this particular sector may not be as predictable as you might think. While in recent years it has been London and the south-east that has really ruled the roost across the property market as a whole, it’s all change when it comes to the rental market. A newly-published map of the sector has shown that some of the best returns are actually found in the north of the country.

Comparison website TotallyMoney.com showed that properties in the north of England and across Scotland are totally outperforming or equalling the performance of those in the south and Wales in the current rental market.

The secret of this rise to success is simple – while those who own homes in the south of the country for rental purposes can bring in a far higher level of rent than landlords in the north can, property prices in the south mean that the rental yields are actually lower overall.

House prices have been rising across the UK for more than a year now, the report stated, showing that those who are putting their money into properties in the south are buying investment assets that have soared ahead of northern alternatives in terms of price.

For example, while the average house price for England and Wales as a whole has sat at just over seven per cent, in London, the Land Registry figures show that prices have climbed by an astounding 19.3 per cent in the same timescale.

The best comparisons between the south and the north can be seen by looking at how rental yields in the capital compare to the best that can be found in regional areas.

Held up against the national average yield, which TotallyMoney.com says currently stands at 4.2 per cent, London landlords are still enjoying some of the more favourable totals around.

Plaistow is the best area in the city for buy-to-let investments, with returns in this area sitting at some 5.8 per cent. East Ham, Edmonton, Deptford and Bow all produce yields over five per cent.

However, when compared to the best performing northern cities, we can see how favourable conditions up north can be for landlords.

In Manchester, the average property price currently stands at just £134,950, while the returns can be more than two times the national average.

It is these very favourable conditions that could see more and more landlords looking to the north when it comes to investing, and in Manchester, buy-to-let options like 90 Princes Street offer them a great way to enter the competitive market.

Investors in this new project are able to secure modern studio, one and two-bedroom apartments in the centre of the north-west city, securing themselves a guaranteed return of 7.5 per cent for the first three years.

The fully-furnished, managed and ready to let apartments in the city centre allow investors the chance to make a passive income from a property that will be highly appealing to young professionals thanks to its location and its attractive modern design.

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