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Insight & Opinion

Does the north offer buy-to-let owners the best efficiency nationwide?

Author: Gemma

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Over the last few years, the north of England has become an increasingly popular place for buy-to-let investors to spend their money in. Swelling student numbers, improved digital economies and higher number of companies partaking in the business exodus away from London means that demand has climbed in these areas of the UK, and it means there’s more appetite for investment.

But is the north the most ‘efficient’ place in the UK to buy property for investors?

According to a new study, it is. Ranking a number of different factors, including price, income and average rental cost in each area, Property Partner ranked UK towns and cities and found that the majority of efficient investments can be found in the north of England.

The study discovered that each of the top ten locations in terms of efficiency can be found in the north of England, while every one of the least efficient is in the south of the country, showing the divide that has helped to attract more and more investors to northern parts of England.

Stoke-On-Trent is the most efficient place to buy in England, according to the study, which also discovered that Oldham and Liverpool rank high for investors in the private rented sector. In terms of yields, it was another star of the north – digital champion Leeds – that came out on top, bringing in some of the strongest results found anywhere in the country for investors.

Leeds currently offers investors returns in the region of seven per cent on their investment, while Gateshead, Stoke-on-Trent, Rochdale and Newcastle all come in near top of the list with yields above 5.5 per cent.

In terms of the most efficient places, the remainder of the top ten was Middlesbrough, Newcastle, Stockton-on-Tees, Gateshead, Rotherham and Rochdale, showing just how strong the north of England is in general.

The reason for such strong efficiency in the north is simple. While demand has climbed in recent years, pushing the rent that landlords can make on their properties ever higher, the price of homes has not climbed at the same pace. It means that it’s become easier than ever in the north to get properties that can make real money without having to spend too much to do so.

Dan Gandesha, founder of Property Partner, said: “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.”

He also went on to add that in recent years, it’s been those who didn’t follow the crowd and gambled on emerging regions like the north of England who have seen the most success when it comes to long-term rental growth.

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