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Buy-to-let hotspots and ‘not-spots’ revealed

Every one of the UK’s top 10 buy-to-let sweet spots is in the North, according to research from a property investment firm.

Property Partner said there is a stark North-South divide in the efficiency of local buy-to-let investments, with the 10 least efficient places to be a landlord in the South of England.

The best place for property investors

Stoke-on-Trent is the UK’s buy-to-let hotspot, boasting the best combination of affordability and rental return, making an investment more efficient than anywhere else in the country, according to the research.

House prices in the town are just £117,586, while rental yields are 6.57%.

It was followed by Oldham in second place and Liverpool in third.

Bottom of the table

The South dominates the bottom of the rankings thanks to high demand pushing up prices, making it more difficult to enter the market and leading to weaker rental yields.

Potential landlords in Poole face the most challenging investment in buy-to-let, with average property prices of £762,532, and rental yields of just 1.94%.

It was followed by Central London, and then Sevenoaks. For income-seeking buy-to-let investors, the research reveals a telling correlation between low rental yield and investment inefficiency.

Six of the most challenging areas to profit from buy-to-let are also among the 10 lowest yielding areas. They include Poole as well as Sevenoaks (2.48%), Cambridge (2.51%), Chelmsford (2.53%), St Albans (2.55%) and Bournemouth (2.68%), all markets with high demand from owner occupiers prepared to pay premium prices for a popular location.

Dan Gandesha, founder of Property Partner, said: “What our research reveals 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.

“It just goes to show, you shouldn’t always follow the crowd and the right investment could be on your doorstep where there is far less overall demand.”

Source, Your Money, 2017

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