Using statistics from PropertyData, the letting agent based the results on the average housing prices and rental potential of each postcode area.
Liverpool offered the best returns for buy to let investors, appearing in the top 10 three times. The L7 postcode area came out on top overall with an impressive average yield of 10.7%, closely followed by the L6 postcode which offered an average of 10.4%. This was largely down to low property prices (the average house prices in L7 and L6 were just £105,000 and £85,000 respectively) and the popularity of those areas with students. L5, which covers the Anfield, Everton and Kirkdale areas, was slightly further down at 7th place, offering yields of 9.4%.
The North of England dominated the top 10 of buy-to-let yields, with Manchester, Bradford, Sheffield and Newcastle all appearing in the list. M14 in Manchester and TS1 in Middlesbrough both offered yields of 10.2%. According to the data, the average house price in Middlesbrough is just £61,000, whereas Manchester is considerably more expensive with average house prices of £163,000.
Sheffield, Newcastle and Nottingham just made it into the top 10, all offering yields of 8.5%.
Investors in the North of England have a lot of reason to be pleased with these results. These areas are home to cities that are being regenerated, which often proves to be more attractive than investing in more established areas as there are better long-term prospects.
The director of Benham and Reeves, Marc Von Grundherr, agrees that the buy to let market is still looking healthy. In a statement, he said: “Despite the government’s attempts to dampen the appetite of the sector, it remains a lucrative business and, for those with the time to commit, there are plenty of buy to let honey pots out there that will bring a great return on your investment”.
As it stands, there is a huge demand for good rental accommodation with many areas experiencing a shortage in housing, and this isn’t expected to change any time soon. So, despite the government’s efforts to deter investors in this sector, a buy to let property is still a rewarding investment.
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