Research conducted by Direct Line for Business has reported a significant variation in rental yields for landlords dependent on where their properties reside within the UK.
Despite a rise in overall house prices by 17% in the last three years rents are only up by 4.7%. The average yield noted by Direct Line for Business across the UK was 3.6%, despite this some landlords can achieve rental yields up to 7.1%. As a result buy-to-let investors are encouraged to look further afield for the best investment.
How does this add up regionally?
Rental yields differ greatly dependent on their location. For London landlords, where the average house prices can exceed £480,000, many receive an average yield of 4.4%. The lowest yields reported were found in the east of England where landlords can expect an average yield of just 3.5%.
Contrastingly, the cities of Belfast and Glasgow represented some of the highest rental yields in the UK with yields of 6.4% and 6.9% respectively. This suggests they may be an interesting prospect for savvy buy-to-let investors.
Locating your ideal property
Landlords are encouraged to always complete comprehensive research in an area before investing in a property that is further afield. This way landlords are able to determine if the property works for them and is suitable for the types of tenants they let the property to.
For example, recent research conducted by the National Landlords Association (NLA) has suggested that despite the perceived risks, families may be ideal tenants. Families’ desire for long-term lets can also represent a longer rental yield for many landlords, which makes them an attractive prospect. Read more here.
While increased rental yield is appealing landlords must also be aware that this reflects risk. Landlords may encounter problems visiting the property to carry out inspections and maintenance if they live a significant distance from the property. One alternative is to seek assistance via a letting agency.
For advice on dealing with letting agents check out our comprehensive guide here.