Where are the best yields?
Many landlords are beginning to feel the squeeze on their buy-to-let income thanks to tax changes and an interest rate rise, so finding the best yield is more important than ever. If you’re new to property investment and are baffled by the phrase, your gross yield describes your annual rental income, expressed as a percentage of the total value of the property. Not only will a good yield improve your profit potential, it will also work in your favour when remortgaging, as lenders are increasingly looking for greater margins when lending to landlords.
The quicker you realise the best property investment may not be on your doorstep the better and although you may feel more confident investing in an area close to home, it may not make as much financial sense. Helpfully, TotallyMoney ranked the top 10 UK buy-to-let postcodes in June 2018 by rental returns, to establish where the best yields were. Perhaps counter-intuitively, it is the North where landlords stand to do best – not London or the South East as many may have thought in the past.
Liverpool took the top two spots with yields of 11.79% and 11.52% in the L7 and L6 postcodes.
In third place was Middlesborough’s TS1 postcode, where yields are 10.94%.
Spots 4 to 10 were taken by Edinburgh (EH8), Manchester (M14), Newcastle upon Tyne (NE6), Liverpool (L1), Preston (PR1), Manchester (M19) and Blackpool (FY8) – all of which had yields between 8.53% and 10.62%.
For comparison, the average buy-to-let yield in the UK is 3.7%, according to TotallyMoney.
Landlords set on London should look east for the best yields, with East Ham (4.81%); Plaistow (4.52%); Thamesmead (4.48%) Manor Park (4.3%) and Chingford (4.11%) proving to be the best five areas.
New landlords and investors looking to expand their portfolios should use the latest yield information in tandem with house prices to establish where the cheapest properties with the best yields are, maximising income opportunities. Always be aware that longer term capital value rises will come into play as part of a total return.
The beauty of buy-to-let lies in the fact a landlord doesn’t have to live anywhere near their investment. The lettings and property management sector is set up in a decentralised way, so property investors can chase the best yields and instruct trusted professionals manage the let on their behalf.
Viewber is just one of a number of investment partners who helps landlords, and agents, source and manage investments on a nationwide basis. Our UK-wide coverage means a landlord can send a Viewber to tour a potential investment anywhere in the country, show potential tenants round and conduct mid-term inspections – all on a ‘pay per use’ basis.’
If you’ve got an eye on a high-grossing buy-to-let far from where you live or you have a vacant property that needs a watchful eye, ask Viewber to carry out a property visit on your behalf – saving you the cost, time and hassle of travelling.