2 min Read
03 Jun 2014

Written by Liam

Over 30 years experience in financial services, residential lettings and property sales. Director of a leading national estate agency chain, until leaving in 2008 to pursue other commercial interests. Vast experience in new business development, business change, management development and business strategy.

More about Liam

Where to invest in a buy-to-let property to get the best return

Where to invest in a buy-to-let property to get the best returns

Where you should invest in a buy-to-let property to get the best returnsLocation, location, location is a cry often heard as the most important factor when looking for a new home. This key factor, however, also applies when you are looking to invest in a buy-to-let property.

The returns on a buy-to-let investment come from two areas - rental income and increase in property values. It makes sense, therefore to invest in an area where you can maximise your overall returns rather than just buy a property in your local area.

Here I take a look at the regions of the UK that can offer you the best return on your hard earned cash.

Average rental yields and property price growth by region

 

Region

  Rental Yield (1)

Growth (2)

Total Yield

London

4.5%

16.3%

20.8%

South East 

4.9%

7.8%

12.7%

East Anglia  

4.3%

7.5%

11.8%

North West 

7.1%

4.3%

11.4%

Yorkshire and Humberside 

6.8%

4.0%

10.8%

South West 

3.9%

6.2%

10.1%

East Midlands  

6.2%

2.8%

9.0%

West Midlands  

6.0%

2.8%

8.8%

Wales  

4.6%

3.3%

7.9%

North East 

5.4%

0.1%

5.5%

(1) Rental yields provided by LSL Property Services plc

(2) Property price trends provided by Rightmove

Conclusion

  • There are no right or wrong answers to buy-to-let investment location, but as you can see from this table the returns can vary greatly
  • It's probably no surprise that London and the South East are riding high on the table but high property prices in these areas could be a barrier to entry
  • Be aware that these returns are a snapshot and both yield and growth can vary over time
  • Rental yields above are quoted as gross without deductions for agency fees, void periods, maintenance etc.

(image by Stuart Miles via freedigitalphotos.net)

Looking for a financial adviser near you?

Do you need financial advice? An independent financial adviser can show you how to make the most of your money.

Simply find your nearest qualified and regulated adviser using the UK’s largest adviser search.